Boracay - Investments and Business Opportunities

Beautiful Boracay: Enticing Tourists, Inviting Investors

Boracay is one of the many places in the Philippines that has an exciting story to share.

Put a mark between 1980 and 2010. You will discover a gradual metamorphosis of a once desolate island where native Atis tilled lands to a tourist destination where inhabitants bargained for sales and offered their extra rooms for billeting.

In short, a span of three decades has shown how potential could turn into profit. Boracay, known for its talcum-soft white shores in the international tourism scene, offers many investment opportunities for savvy individuals and businesses who could use their insight to leverage on what the financially promising island has grown into.

A broader Look

Investors and buyers doubting what Boracay could hold for them for the future only need to look at the host country’s recent economic performance. The Philippines—rated by Goldman Sachs as one of the Next Eleven economies—has been performing at par with its neighbors. In 2013, notable GDP growth of 7.2% was attributed to increased private consumption, fixed investment, and government spending on infrastructure and social services.

In the last decade, this growth rate was only one of three (7.1% in 2007 and 7.6% in 2010), showing that the Philippines is capable, given the right circumstances and the right choices from its leaders. But what other indicators could investors and buyers rely on? First, there is the Asian Development Bank forecast of respective 6.4% and 6.7% GDP growths in 2014 and 2015—quite an easing from 7.2% in 2013, but still high in the book of experienced capitalists.

With the Philippines slowly ranking up in the World Bank’s Doing Business survey due to continuous trading and investment—not to mention increasing confidence from business people—it is a propitious time to start setting up a business or buying properties in the country’s productive locations like Boracay.

Investment Landscape On Boracay

Boracay’s famed island, which received approximately 1.5 million local and foreign tourists in 2013, earns around Php30 billion ($2.3 billion) year on year. The Philippine government has long recognized the island’s economic potential that the Department of Transportation and Communications (DOTC) adopted the Open Sky Policy, allowing several Asian airlines to fly directly to Kalibo, Aklan. This policy, together with pro-tourism ordinances by the Philippine Tourism Authority, further augments Boracay’s profitability.

Boracay’s investment landscape involves three main groups: capitalists looking to build hotels, individuals establishing resorts and villas, and businesspeople opening commercial establishments.

The first category—which needs now to take up spots in areas other than crowded White Beach— only has to abide by the ease-of-shoreline rule, building height limit, and open-space allotment required by the municipal government. All investors have to ensure proper waste disposal, a commitment to the government’s ordinance, and a responsible way of maintaining the beauty of the island.

As part of the Boracay Island Comprehensive Development Plan on tourism, businesses have to be accredited and follow standardized prices for services. Although violations of several commercial and maintenance rules have been rampant, planned incentives for certified businesses will substantially create a positive tourism climate on the island.

Note To Boracay Investors

Because banks are still unable to set branches on the island (although ATMs are present), financing loans are not available for purchasing real estate. Therefore, cash is the only viable payment option.

Ownership of land covered by the 60% “alienable and disposable public lands” under Proclamation No. 1064 by the Arroyo Administration is only possible for Filipinos; foreigners can only be issued a Certificate of Title for a property, such as a house, a condominium, or a business. However, a joint partnership between a Filipino and a foreigner can own land in Boracay.

In Boracay, owning real estate can be done by erecting new hotels and resorts, restaurants, service shops, souvenir shops, or villas and private residences. Although it might be challenging to get a building permit, capitalists can look for people willing to sell their home, business, or part. Others can purchase hotel rooms and profit by renting them out to tourists, which is the practice among private homeowners who want days away from Boracay open to passive income.

To date, there is a sizable number of hotels, resorts, and service providers in Boracay, particularly in the top choice White Beach. Investors looking to build hotels have to choose other rising areas, such as Diniwid, Lapuz-Lapuz, or Balinghai—some locations closest to either White Beach or Bulabog. Areas nigh top attractions such as Crystal CoveMount LuhoPuka Beach, and Angol Point are alternative spots for establishing a business or private property that can be profitable.

There does seem to be a little obstacle in obtaining property in the Philippines’ flagship island destination. Boracay will continue to embrace development in the coming years. Hence, investors only have to focus their capitalist mind on one balk: to ensure yields from their investment amid costs and fees associated with property ownership on such a premier island as Boracay.

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