RRR cut seen to boost construction of new hotels
The additional loanable funds that will be injected to the local economy following the easing of banks’ cash requirement could boost private construction activities, with the hotels and accommodation sector expected to see a building boom that could support the industry.
Speaking to reporters, Emilio Neri Jr., lead economist at Bank of the Philippine Islands (BPI), said the decision of the Bangko Sentral ng Pilipinas (BSP) to further trim the reserve requirement ratio (RRR) of banks would unleash about P380 billion in fresh liquidity that may partly go to hotel operators as loans to finance their construction projects.
Such an expansion may also get support from declining prices of construction materials, Neri added. This, in turn, could help offset the impact of the exit of Philippine offshore gaming operators or Pogos, as well as the pandemic-led shift to work-from-home arrangements on the local property market.
“Some of the sectors that can benefit are hotel and accommodations. I think there are at least 170 hotels that are being built as we speak and more could actually come in to help offset some of the negative impact of the Pogo exit,” he said.
“So bottomline, with lower inflation and construction materials, a stronger peso to some extent, and loans being more readily available because of the reserve requirement cut, there could be a big boom for accommodations and hotels. Not just local brands,” he added.
