SINGAPORE (S&P Global Ratings) May 22, 2025--The top four property developers in the Philippines are leading their sector out of a post-pandemic hangover. The entities are pivoting to more high-end projects where demand has been resilient. While the firms' leverage is higher than pre-pandemic, their presales are expanding. The investment positioning for growth should prove constructive, in our view.
This is according to a report we published today, titled "Top Philippine Developers Pursue Growth Despite Industry Strains."
The top four property developers are Ayala Land Inc., Megaworld Corp., Robinsons Land Corp. and SM Prime Holdings Inc. Together, they account for 60% of the market capitalization of the sector and the total revenue among listed real estate companies in Philippines. These four were selected based on a sole criterion: that their market capitalization exceeds US$1 billion.
"The capital expenditure of the top four has largely reverted to pre-pandemic levels, with their spending shifting to investment properties and land acquisitions, from residential development," said S&P Global Ratings credit analyst Fiona Chen.
"The rapid rebound in capital expenditure underscores the top four's focus on growth over a five to 10-year horizon. Even in a period of economic uncertainty, they have prioritized expansion, counting on the country's broad-based economic growth, as well as a significant runway for property growth," said Ms. Chen.
The real estate sector is a cornerstone of Philippines' economy. It contributes about 11% of GDP and comprises about 17% of the total market capitalization of companies traded on the Philippine Stock Exchange.
KEY TAKEAWAYS
- The top four Philippine developers will ramp up premium residential projects over the next one to two years to offset the slowdown in mass market.
- Capital expenditure has returned to pre-pandemic levels, but with a gradual shift in weight from residential projects toward investment properties and land acquisitions, reflecting a growth stance.
- Leverage remains higher than the pre-pandemic level; we do not expect material deleveraging over the next one to two years as the top four continue investing for growth.
- The top four developers are all subsidiaries of large, diversified groups and will benefit from broad funding access, including bank loans, bonds, capital recycling from REIT platforms and sizable recurring income.
This report does not constitute a rating action.
The report is available to RatingsDirect subscribers at www.capitaliq.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by sending an e-mail to research_request@spglobal.com. Ratings information can also be found on S&P Global Ratings' public website by using the Ratings search box at www.spglobal.com/ratings.
| Primary Credit Analyst: | Fiona Chen, Singapore + 65 6216 1085; fiona.chen@spglobal.com |
| Secondary Contacts: | Yijing Ng, Singapore (65) 6216-1170; yijing.ng@spglobal.com |
| Johann Tan, Singapore; johann.tan@spglobal.com | |
| Media Contacts: | Richard J Noonan, Melbourne + 61 3 9631 2152; richard.noonan@spglobal.com |
| Ning Ma, Hong Kong (852) 2912-3029; ning.ma@spglobal.com |
No content (including ratings, credit-related analyses and data, valuations, model, software, or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced, or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees, or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness, or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.
Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment, and experience of the user, its management, employees, advisors, and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.
To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.
S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process.
S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.spglobal.com/ratings (free of charge), and www.ratingsdirect.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.spglobal.com/usratingsfees.