AGRIBUSINESS

Mangoes- The Money Tree

mango

The Philippines currently ranks as the fifth largest producer of Mangoes in the world, and the fourth largest in Asia. India, where mangoes probably originated over 4,000 years ago is by far the largest, but domestic consumption takes most of their crop. Hong Kong and Japan are the biggest buyers of Philippine grown mangoes. The mango tree, a relative of the cashew, pistachio and marula trees, is a
hardy plant that prefers hot and humid conditions and lowland areas. Trees will fruit in 4 to 5 years and continue to do so for decades to come. As a rule of thumb, you can expect to make about P40,000-60,000 a year from each tree according to a mango grower I spoke to last year.  He claimed that each tree, when mature and properly harvested and maintained, can yield up to 2 metric tonnes of fruit, at around P20-30 a kilo.  I would think that these figures can be improved upon and offer them only as a guide.

Each tree requires at least 100 sqm of space, they have a 6m deep tap root and many other roots growing off of that so on my 2000 sqm lot I could plant 20 trees.  Planting from seedlings requires patience and a lot of care. Far better to plant more mature trees. Seedlings go for around P50-100
each, and grafted saplings about P500. There are two main varieties, the Pico and the Carabao.  The Carabao variety is the more popular and by far the one to plant.

The trees need to be sprayed to help flowering and to prevent fungicides and pests from ruining your crop. Cebu pioneered the bagging of fruit in the late 1980’s and today most commercial orchards follow this practise.  Some use newspaper, while others prefer brown paper bags, the baggers being paid a few centavo’s per fruit bagged.

Harvesting usually happens in spring, but of course your final market will have a bearing on when you harvest and how you keep the fruit until it ripens.  If  you are exporting then you will probably harvest earlier and keep the fruit cool (10-13 degrees celsius) to prevent black spots and early ripening.  There are about half a dozen major exporters in the country and the smart money is to sell your crop to them, rather than endure the drama of developing an export market yourself.  Once you are ready to harvest, local buyers will appear magically so don’t sweat that part of the process. What is most important is that you hire at least one experienced local who knows mangos.  On top of that, you can also attend courses held by MIN, the Mango Information Network, http://www.min.pcarrd.dost.gov.ph and the Department of Agriculture http://www.da.gov.ph to learn more about this crop.  I would also suggest a “Google” search using “growing mangoes” or similar
and the wealth of information that is produced will keep you reading for days!

Be wary of sites that detail mango information applicable to Australia, South Africa or anywhere other than the Philippines.  There is more than enough local info available to use as a guide, although some of the other countries may well be further ahead in the application of technology.  However, you are
growing in the Philippines and it will pay not to be too radical at first.  Keep the overseas methods for the years ahead, when you are already making a decent living doing it the same way the locals do, tried and tested.

Other tips to consider are that you should keep the dead branch material around the base of the trees under control.  The same can be said for pruning to assist spraying and also sunlight penetration.  Most pests prefer to eat your trees in the dark, well pruned trees will make life harder for them.
So too will planting bamboo nearby as there is a beetle that lives in bamboo that loves the pest that eats mango trees!  Nature at work, chemical free! Man farmers also cross plant other crops between the trees to help with fertilization of the soil and to increase the yield from their land.

Mangoes are a great cash crop and safer than many other choices, but they do take time to mature and produce a harvest.  They take work, care and effort, like any other crop but they can give you a nice little earner as the years go by.

REAL ESTATE

RENTING IN THE  PHILIPPINES

Finding a place to rent here in the Philippines can be a challenge in some areas.  While in Manila, Cebu, Davao and other big cities there are rentals advertised in the newspapers, in the provinces it is often a case of word of mouth.  Luckily there are lots of mouths to pass the word around and you will probably be inundated with properties once the word is out.

We found our last two rentals by driving around the area we were interested in living in and looking for signs posted on telegraph poles.  The down side of this is that very often the signs are well out of date.  Like political posters, they are quick to post and slow to remove them.  If you have a Filipina
wife, have her make the call, at least until the price is established.  Hearing a foreigner on the other end might tempt the landlord to offer the American Discount, usually four times the local price!

You can enlist “professional” help in finding a place to live. There are some people who could be loosely termed “real estate agents”.  Different to a broker, who is licensed, many agents are merely people with a desire to make a buck on the side by introducing you to a home owner looking for a
tenant. This doesn’t mean they won’t find you a home, just that they will show you everything they can that makes them the most commission first, before actually finding you something that might be closer to what you want and specified.

Once you find some properties to inspect, take your time to study the local area.  Are there KTV machines going at full distortion all hours of the day and night?  The houses either side, are they permanent or squatter shanties? What about vehicular access? Many places here are off the road and
accessible only on foot down an alleyway.  This is due to the original Lot being divided among many siblings and without regard to how you are going to get your furniture in there, let alone park a car off the street every day.

Water supply in many places, even more upmarket areas and sub-divisions, can be erratic at best.  Water pressure may be very weak and delivery limited to only a few hours a day.  This is inconvenient and having to remember to fill buckets every day at 11am or whenever will get old very quickly.  Ask
about the water pressure and if it is available 24 hours.  Then turn on a tap and check!

Power supplies may be billed to you, or to the landlord, who will give you the bill to go and pay, or you pay him.  You could be in for a surprise and end up paying for his aircon and lighting without knowing it.  You might also have an illegal connection that can bring you grief and aggravation when the power company charges you with being responsible!  If the house is inside the family compound, then make sure you get the bill in your name if you can. Check the meter and cabling yourself to see where it goes from the power pole on  the street to your house.

Our power is in the name of the landlord’s son.  The water is in his daughter’s name.  We get the bills the day they are due or just after, on average. We have had to pay for his slow attendance to reported leaks when it took him weeks to fix a leaking tap and overflowing septic tank.  Our electricity was almost cut off because he forgot to hand us our bill.  Be aware of these things and ask lots of questions when you inspect.  This is a business arrangement after all, so be polite, but get the answers you need to make a sensible decision.

A friend of mine was living in an apartment attached to the landladies’ house. She was murdered and now the heir to the estate wants him out, despite his having a lease and having paid two months rent in advance.  Unforeseen  things do happen and it’s important not to let yourself get pushed around.  If you have a lease then make sure you read it!  Don’t be afraid to stand up for your rights, you do have some, despite the common belief to the contrary here.

Don’t be in a hurry to rent.  The seller needs the buyer here more than the other way around.  There is no shortage of properties for rent, just not enough proper advertising to help you find what is on offer.  The situation is improving as more people adopt the ways we are used to in the west, but so much here is done through third parties, relatives and intermediaries, that changing the old habits is taking time. I have had some landlords, particularly Chinese Filipino’s, demand six months rent up front as a bond, plus the first month in advance! Then they want a twelve month lease with post dated checks to cover the rent, exclusive of the six months already paid as a bond!  The lease said if we moved out before the 12 months were up, we lost the six months bond!  The general practise is to
pay one month in advance and one or two months up front as a bond. Most landlords prefer a twelve month lease but you can negotiate shorter periods.

Rental properties may be offered either furnished or unfurnished, or both but don’t expect much with furnished.  Sometimes they really are fully furnished but often it means just a bed, dining table and chairs and a sofa of sorts. On average, renting furnished will add about P2000 a month to the average
place going for P5000-P15000.  There are some terrific places available at very low rates and with wonderful landlords, you just have to be lucky or look long and hard. Off street parking is important but often what is advertised as “with garage” is just a car port or even nothing more than a space behind the front gate.  We think of a garage as a fully enclosed building in which you park your car and no-one can see in.  Here, if it is outside the house and has a roof of sorts then it is a garage!  Renting in a guarded sub-division may incur extra costs for admin fees, the guard and so on.  Make sure you negotiate that the rent is all inclusive and that any other expenses are carried by the landlord. Like anything in business, it is all open to negotiation and it is up to you to negotiate BEFORE you sign the contract and pay your money!  Double check claims that the phone is already in place and just needs connection.  Connection here could mean running a cable in from miles away!  Double check everything, not just because there is a chance you might be getting duped, it happens, but mainly because even if your potential landlord speaks excellent English, same words can mean very different things.  This is, after all, the Philippines!

Money Matters

A Few Tips For New (and Old) Players

money

Extracted from StreetWise Cebu, first in a new series of in-depth guides to popular Philippine locations by Perry Gamsby.

I no longer waste my time and money with travellers checks, haven’t bothered with them for nearly a decade or more.  It is far easier to carry a credit card and an ATM card as there are ATM machines all over Cebu and growing in number in the provinces.  Those with Cirrus, Plus, Banc Net symbols on them, or Visa or MasterCard DEBIT cards, can be used at just about any ATM.

If you are coming to live, you may want to T/T your money to a bank account opened with a philippines bank in case you need to access large sums for car and house purchases.  Otherwise, just leave it in your home account and use the ATM to withdraw money when you need it.

Most banks allow you to withdraw up to your home banks limit, for me that is AUD$1000 per 24 hours.  However, some ATMs will only release Php4000 per transaction, and then only up to Php25,000 per 24 hours. Others will allow Php10,000 per transaction and this is important as you are being charged every time you perform a transaction. A transaction means inserting your ATM card, punching in your PIN and selecting withdrawal etc. With my EquitablePCI Bank ATM this means I have to take out P4000, six times in a row to get my maximum daily withdrawal limit of P25,000.  No fun if a long line of people are breathing down your neck wanting to use the ATM!

Each bank is different but I have found HSBC to be one of the more generous in daily withdrawal amounts, although they ask for more money held on deposit if you wish to open an account with them.  BPI, Bank of the Philippine Islands also allows larger withdrawals than MetroBank, EquitablePCI, PNB Philippine National Bank and ChinaBank or others.

Philippine banking allows just about anyone with enough clout and cash to open a bank, either a rural or a savings bank.  Some smaller banks are specifically for a certain group or community and should be avoided.  These local banks often go under taking everybody’s money with them.  Most banks advertise they are covered by the statutory government insurance of depositors funds, but this has a limit of Php100,000 or less than US$2000.  US Dollar accounts often don’t have any protection whatsoever.

You can open a US Dollar account with a few hundred dollars, depending on the bank you choose.  They vary from time to time so check out the banks with links at the end of the manual for the latest details.  Most say you need to keep a minimum amount of a few hundred dollars in them to keep them open but I have an open account with less than two bucks in it. Interest paid on these deposits is negligible and not worth my time to research who offers the best rate.  US Dollar accounts are simply a place to keep your US Dollars where a buck is worth a buck and exchange fluctuations can’t hurt its value.

I also have a savings account with an ATM card in a Peso account.  To open an account you need to show ID and often an ACR, although many banks don’t ask for this document.  You may have to provide one or two ID photos, although EquitablePCI Bank didn’t require photos when I opened my account with them last year.

All transactions of US Dollars are noted, even down to the serial numbers of each and every bill, depositing and withdrawing.  Depositing large sums of money can cause headaches as the US has laws that require notification of any transaction of US$10,000 or more per transaction. You also need to declare if you are taking that kind of currency out of the country and if you are bringing it into the Philippines.

Obviously the excuse is they are trying to control money laundering by drug gangs and terrorists but the truth is these criminals use the regular banking facilities to move their money around.  I would suggest you T/T amounts of US$5000 a day until you get it all here, or keep it in the States and draw what you need from the ATM as you need it.  If you have to bring in a large amount of cash, I’d do it the old fashioned way and line my shoes, clothes and carry on bag.  Of course you can declare it, its not a crime they just want to know what you are doing.

You could get sneaky and buy Bearer Bonds and other negotiable instruments, even convert everything to gold jewellery and then cash it in but I am sure you would lose out on the deal.  I wouldn’t know
where to buy a Bearer Bond, or where to cash one in.

For everyday people the simple answer is the ATM card.  If you are going to the province for a visit to her family, just make sure you have cash in small bills before you go.  Few places in the city can change P1000 bills and some even struggle with the P500.  In the province a P100 bill is big money, so have lots of P20 and P50. Unless going for a while or donating most of it to her family, US$200
would take a lot of spending in the province.

Credit cards can be a problem as the merchant is hit by high charges from his bank, so the protocol is to pass these onto the card holder. Expect up to 8% charged to your card for using it to buy accommodation, meals or cash advances from merchants.  Few shops outside of the big department stores or those in the city malls will accept your card and getting a cash advance at a bank can take half a day but at least an hour the first time you try.

Not every branch will give over the counter cash advances on credit cards, even some of the big Cebu City branches won’t do it.  You will need your passport and a lot of patience as they double and triple check every little detail.  Equitable PCI across  the road from SM Mall will do it, go to the New Accounts counter and start the ball  rolling there.  Have your passport with you!  Modern electronic banking is only slowly happening and nobody really trusts the system yet, so be prepared for funny looks and lots of waiting.

If you bring cash, then exchange it at one of the kiosks in Ayala Mall, Mango Square Mall or at Robinsons on Fuentes Osmena.  Forget changing it in SM Department store, they only take crisp perfect notes and expect you to write down all the serial numbers.  Be wary of anyone coming up to you on the street offering rates even a peso per dollar more than what everyone else is offering (except major hotels).  The margins are razor thin with forex and the kiosks mentioned consistently
give the best rates and are straightforward genuine businesses.  Major hotels, in my opinion, get greedy and try to rake in extra money a they know their guests are usually unfamiliar with where else to go. Anyone who can afford their rates usually doesn’t flinch at losing a few cents per transaction in exchange for the convenience and security of doing it in the hotel lobby.

No matter where you exchange, always count it out yourself, even if you followed the clerk as she or he counted it into your hand.  Never be rushed or feel rushed by other people waiting for service.  If the person getting agitated is a Filipino, then you are getting scammed. Filipinos would rarely be exchanging money in the same place as you but if they are, there is no way they would show their impatience and irritation at you for taking too long.  It is not the Filipino way and it means they are a part of the scam.  You have been short changed and they will pressure you into accepting the clerks count and moving away from the window.  Once you do if there is any money short there is no way you will be able to correct the problem or prove the error.  STAY AT THE WINDOW UNTIL YOU COUNT THE MONEY YOURSELF AND ARE SATISFIED.

For big purchases such as cars and property, you should get a Managers Check from the bank.  Never carry cash around in large amounts, no matter how short the journey.  The car seller may have a relative ambush you on your way back from the bank with the money to buy the car. He keeps the car and a share of the money and you are none the wiser.  If both parties meet at the bank and exchange Managers  Checks, then there is no opening for a problem to occur.  It is the way Filipinos do it here and so it has to be the safest way for both parties.

I carry my money in a wallet in my back pocket. Unless I am using jeepneys or carrying more than a few hundred pesos.  Then I carry the wallet in a front pocket. I once had to carry a payroll off Php30,000 in small bills for the workers on our bar. I laid the wads of money along my left forearm and bandaged the arm up.  It looked like I had a broken arm in a cast and the money travelled safely from Cebu to Malapascua with nobody the wiser and the men were all paid on time.  Be aware who is watching when you withdraw or exchange any amount of money, to a starving peasant, even twenty bucks is a fortune.

Getting Sick On The Cheap!

Visiting The Quack Doctor.

If you are living on a Filipino budget, i.e.; a frayed shoestring, then getting sick is one of the ever present fears that can spell out and out financial ruin.  A visit to a private hospital might set you back
several thousand pesos for just a few days stay, and that is providing the hospital admits you at the same level of treatment and accommodation as they would a Filipino.  Foreigners are well known to
complain about the primitive conditions and lack of adequate medical facilities and no self respecting hospital administrator would want to open that packet of buwad voluntarily.

Even if you are not turned away from the local government hospital, the conditions and treatment available may very well be hardly worth the few pesos it will cost you.  If you don’t have medical insurance (covered in a future issue) then you may have to look at less costly, but also less conventional alternatives.

The Quack Doctors, as they are legitimately called, are practitioners of the native healing art of Hilot.  When I trained in the Filipino martial art of Arnis, I was also taught some Hilot techniques.  Mostly
bone setting and muscular ailment treatments using herbs and liniments as these were the main injuries caused by training.

The Hilot I was taught was all very valid and extremely effective naturopathic style medicine. What is offered as Hilot from the local Quack doctor is not all so legitimate in my opinion. From the half a
dozen Quack Doctors I have seen I would say that 70% of what they do is very good and effective medicine.  The other 30% is pure mumbo jumbo! Lots of spiritual healing and waving of charms, mumbling and palming goats entrails and chicken blood to make it appear as if they operate without anaesthetic.

Having said all of that, I have personally observed an operation where I swear I saw the doctors hand go into the patient’s abdomen.  I can’t explain it but if it was a trick then it was a very clever one.  I also know of several rip off artists practising around Cebu, but they  won’t see a foreigner as a patient.

Your genuine barangay quack doctor will see foreigners and they will treat you just as they would a local and most expect the same fee, up to you!.  I usually leave P40 or P50, but my wife will leave P20.

I have been treated for skin rashes, ear aches, tooth aches, pulled muscles and G.I. tract problems, all very successfully.  My wife has been misdiagnosed by one so called famous quack operating in Cebu down near Colon, but thankfully no harm was done.  When she was pregnant it was the quack doctor who was successful in turning the baby so she was no longer a breach.  Our western trained obstetrician was too worried to risk it!  Of course the wizened old hag we went to has been bringing Filipinos into this world since WW2!

I think there has to be a lot of value in local healers.  These people have been practising their medicine for generations, centuries in fact and long before the arrival of the Spaniards.  They must have a better than 50% success rate or else by now the people would be wise to them and few would attend their practise for treatment.

If it is something serious that requires micro surgery, or a major illness or disease then I would still seek western medical help. For many everyday ailments however, I truly believe the local Hilot practitioner, the Quack Doctor can offer very affordable relief and treatment.  Over the many years the same ailments and maladies would have presented themselves time and time again.  These quacks were for many years the only form of medicine available, they can’t all be charlatans and not all of their treatment mere trickery.  Logic would dictate sufficient veracity in their methods to have kept them in business down through the ages, especially in a society where not so long ago you would not be just tarred and feathered for being a snake oil salesman, you would be executed.

Many Quacks are also the village witch doctor, so you can see them if the Onggus are giving your pigs a hard time.  We lost eight in a row (along with most of the piggeries in the area) and it was only after the quack did his thing that we were Onggu free and since then, no more losses.  Of course this was about the same time we put up flyscreens around the styes to keep the birds out.  The birds spread disease from one farm to another, but we know it was really the Onggu!

If you have a problem you think the Quack might fix, then have your Asawa take you to them.  She will know where to find one and what’s even better, they will charge so little you will feel guilty feeling the relief from their treatment!  Some of their treatment may seem a little bizarre, but it usually works very quickly.  I have had a long standing heat rash cleared up after just one spitting!  The quack chewed on some herb, then spat on my rash and it was clear within 24 hours!  Another time I spent an hour with a bit of grass sticking out of my ear to cure chronic ear ache brought on by too much scuba diving. I looked a little strange with a green weed in one ear but the pain relief was almost instantaneous.  Keep an open mind and give them a go, if pain persists, see a doctor etc!

SENSIBLE PRECAUTIONS

We Live In Nature, It’s Not A Theme Park.

If we were truthful with ourselves then I am sure we would acknowledge that we live a pretty safe life compared to many others in the world and even more so when compared to our forefathers and ancestors.  Thereisn’t a war raging at the moment that really threatens our lives, despite what some vested interests may try and convince us of to the contrary.  Unless you are living in Iraq or on Basilan Island, the odds of you falling afoul of a war on terrorism related atrocity are pretty low.

However, we do live in a world where nature still rules supreme. Especially here in the Philippines.  In Cebu we are pretty lucky to be sheltered by the surrounding Visayan islands of Leyte, Samar, Negros
and Bohol.  Their protection means the typhoons that do strike this far south usually just produce a lot of rain and some wind and nothing like the maelstrom those up in Luzon often face.

The Philippines is a collection of islands, volcanic islands and we lie on the Pacific Rim Ring of Fire, according to the National Geograp documentary I saw last year.  Very dramatic but also very apt as anyone who witnessed Mt Pinatubo erupt can attest.  There are several active and numerous dormant (or allegedly dormant) volcanoes making up the very land upon which we stand.  The perfect cone of the Mayon Volcano in Bicol has been making noises for some time or late, and Mt Pinatubo is also giving hints she is restless.

On top of all that, there are earthquakes to consider and their oceanographic cousins, Tsunamis, or tidal waves.  Most of us live fairly close to the sea and so this is something to consider.  Can you
imagine a major earthquake hitting your barangay? The mind boggles how our local, antiquated and amateur fire department would cope.

Besides nature and her extremes, there are also the results of average weather events to think about.  Storms can lead to losing your roof, or land slides or flooding, even on a relatively minor scale.  Nothing lethal or life threatening most of the time, but at the very least disconcerting and annoying.  If you had to evacuate your home due to a flood, would you expect your possessions to be there when you return, albeit a little soggy?  I wouldn’t.

I will look at events involving human antagonists another time, like riots and so on.  This time, lets just focus on natural catastrophes and what we can do to prepare for them and live through them.  First of all, don’t get paranoid but don’t ignore the fact that nature does bite some times.  A simple storm could leave you without power for several hours or even several days, how will you cope?

Firstly there will be no light, no internet and no refrigeration. There may be no water if the local supply relies on being pumped andthe pump is on the same grid that is affected by the storm. Two years ago in Bogo we had a “brownout” that lasted for nearly three days. The local water supply was reliant on the electricity grid to power the pump to get it to our taps.  No power meant no water.  Nothing to drink, wash, launder or cook with.  After the first day in the heat and humidity the novelty wore off and bottled water supplies were already stretched as people bought up “gallons” wherever they could for drinking water.

The power and water came back on at one stage and I rushed around filling every container I could with water.  Others thought I was being silly, the power was back on, the water was flowing again, why fill all those containers? Well the power went out again after just forty minutes and didn’t come back for another two days.  Two more days of no fans, no aircon, no television, no karaoke (always a silver lining in any dark cloud) no cold drinks, no fresh food, no ice etc.

Most brownouts last only a few hours, often less.  This one was a three day mongrel.  I was fortunate in that I could afford to put my family in the Red Terror and drive them to Cebu, where we stayed at the Kiwi Lodge for a couple of days until friends rang to say the power was back on.  We could have survived the two more days with no power or water because we were prepared but with the Asawa pregnant there really was no reason not to find a solution such as staying at an hotel.  Of course, that solution may not always be available.

We keep at least three days water supply on hand at all times and regularly cycle through it. Our bottled water supplier brings three “gallons” every week but we use only two, so there is always one
there in case of an emergency.  I just line them up and go through them so the water is never more than a week “old” when drank. I also have another “gallon” kept in a cupboard out of direct sunlight which I swap with a fresh bottle every month or so as I remember to do so.

We have a battery back up and surge protector for the computer, it will give you about 15-20 minutes once the power goes out to save your work and switch off.  Then if it is dark a standing lamp also plugged in will carry on for about the same amount of time giving us light to see by as we get the candles and torches (flashlights) out.

My wife now realizes why I insist on keeping the torches in the same places around the house, along with spare batteries and strict instructions the kids are not allowed to play with any torch except the
one specifically designated as the “one the kids will play with and use up the batteries so it won’t work when you need it” torch.  Keeping them in the same places means they are easy to find in the sudden darkness of a brownout.  Keeping the spare batteries with them and insisting on a little discipline regarding their use pays off when the torch is needed in an emergency and is worth the extra effort required to instil on the average Fil-Am family. (Or Fil-Aus in our case).

We don’t store a lot of food for emergencies, although we do have a cupboard with tinned goods that I make an effort to rotate through every couple of months.  Since we live in the city now we don’t worry
quite as much as what was prudent when we were way up in the province.

My first aid kit, or kits as I have one in the car, one with my dive gear and two around the house, are checked every year or so specifically and given a cursory going over whenever they are used.  I always check these things just around my birthday.  It is an annual event I never forget and reminds me to check the things that may have lain dormant for most of the year and can do with a little attention.

The secret is to get into a routine and stick to it, take a few precautions and not get too carried away.  If I was in the province or felt the threat justified the action I would look at safe rooms in the house, firearms and communications with the outside world etc.  Living in Talisay we have a fire evacuation plan (this is important as many houses here have bars on the windows and doors) and two cell phones to supplement the landline.  Emergency phone numbers are stored in the phone memories and also handy to the landline on a card.

As far as firearms are concerned, my proactive approach to getting on with my neighbours should erase any need to keep a gun around for protection.  Besides which, enough of my friendly neighbours have their own guns so there’ll always be someone around to make noise if needed!

Don’t get paranoid, but don’t get lethargic.  I took the same precautions when I lived in metropolitan Sydney as I take here in Cebu, nature can come calling with an attitude anywhere, anytime.  Keep that
in mind and then get on with living the dream!

A New Lease On Life, Literally!

An Alternative To Buying A Property To Call Your Own.

Many of us expats who head over to the Philippines to settle down and live would love to own our own piece of paradise.  Except for condominiums, we can’t own land, simple as that!

If you have an asawa you trust, then you can always buy the land in her name.  For many, though, the reason they are in the PI is because a female of the species has taken them apart emotionally, financially and in virtually every other way possible.  How then to trust again?  For some it is getting too late in life to pay off another swag of debts from a divorce, start building the wealth again and see out the rest of ones days in comfort.

If you find you just can’t bring yourself to trust your loved one with the rest of your life’s savings, yet you still want more than a condo, what can you do?’  You can move to Panama where I believe you are able to buy land, or Sri Lanka or somewhere else.  But if you wish to remain in the Philippines then you actually have a few decent options you can explore.

Without going into complicated corporate holdings and offshore set ups, the simplest way for a foreigner to own land here is to lease it.

Leasing confers all the rights of ownership, but for a set period. The  maximum period currently allowed is fifty years, WITH A TWENTY FIVE YEAR OPTION TO EXTEND!  Like who is going to be around in 75 years?  If you are, lets be generous, 30 now, you will be 105 when the time comes to vacate the property!

That is the maximum period of lease, you can of course lease for much shorter periods.  Too short a period, say 1 to 5 years and you may as well just rent the property.  The difference between renting and leasing is one has you as a tenant and the other way a virtual owner for a set period of time.  I would say the ideal lease period would be ten to fifteen years with a further ten to fifteen year extension.

Say Jim is 50 and he’s taken an early retirement from moving widgets in Wisconsin.  If he takes out a 15/10 Lease, he will be 65 when it comes time to extend, and 75 when the lease runs out.  At that time he invokes the clause that has him reimbursed for the capital improvements on the land (perhaps he built a dream house?) and he shuffles off to a condo closer to his heart specialist.  Or maybe he negotiates a new lease.

If he died during the lease, Maycelle his asawa and some 25 years his junior, decides she doesn’t want to remain there all alone and heads back to her family in the province.  Jim was smart enough to negotiate a lease that had money pumped in up front to cover the possibility of his bowing out early.  Maycelle was covered if she wanted to remain on the property but she also had the option to vacate.  Perhaps the improvements were left as payment for early termination, or maybe the lessor reimburses Jim’s widow a pro-rata amount for the house they built.  It is up to the parties at the time of negotiating the lease to agree on these things.

This is the beauty of leasing.  You can negotiate the terms to suit both parties.  Let’s look at an example.  Pete has a Lot up for lease.  It is 3000sqm, quite a big piece of dirt.  He offers it for lease but Jim doesn’t need all of it, so they agree on Jim leasing 1000sqm in the west corner. Lovely! If Pete was to sell his lot he could realise, say P200 per sqm (rural lot, nice and cheap!) The 1000sqm he is leasing to Jim is therefore worth P200,000 if he were to sell it.  If he leases it at P1000 per month over 20 years, he will earn P240,000; P40,000 more than if he sold it.

Of course by the time he receives the final payment that P240,000 won’t be worth then what P200,000 is worth now, but at least he still has the land.

A better plan for Pete is to lease the 1000sqm to Jim this way.  Jim pays P100,000 up front and has the first 12 months lease of the land free of further charges.  This keeps his cash flowing for the building of the house he wants to live in.  After the first 12 months he starts paying lease fees of P1000 per month for the next 14 years. At the end of the 15 years initial lease he has paid P100,000 in a lump initial payment and a total of P168,000 in monthly payments.  Pete was able to use the lump sum to buy some other property he had his eye on and the monthly fees kept his fridge full of beer.

Jim now has the option to extend a further 10 years.  If he does then he can either keep paying the P1000 a month lease fee (P120,000) or he pays nothing more and at the end of the lease vacates the land and leaves the house he built for Pete to take over, demolish or whatever. They had agreed on a basic standard of house when it was being built so Pete is happy with the improvements to the lot and Jim saves a lot of cash.  By the end of the lease he is pretty close to spending his days dozing in a hammock oblivious to the world and unable to even spell Alzheimers.

Pete gets his money, plus a little extra and a house he can now live in or rent out and Jim and his asawa have spent 25 of the best years of their lives together, the last 10 absolutely rent free which allowed him to save a fair amount of his retirement income each month.  Jim lived there happy in the knowledge that if he were to pass away, Maycelle was allowed to live on in the house for a further 2 years if she chose, rent free no matter where in the lease period they were when Jim died.  How come? Because Pete and Jim agreed on everything when they negotiated the lease, wrote it in plain English and had it notarised by a Notary Public at the local courthouse.  Simple and understood by all parties.

You can take advantage of the benefits of leasing over owning.  Anytime you see a Lot for Sale, consider asking if the vendor would like to keep hold of their property and negotiate a lease?  If you can offer close to the purchase price and then moderate monthly lease payments then there is every chance a vendor may prefer to lease you their land.

Leasing is a handy vehicle if you want to operate a resort. You lease the land as a foreigner, then sub-let it to a corporation put together to run the resort.  You hold 40% of the corporation and make sure at least another 40% is held by a Filipino you trust, or the other four incorporators hold 15% each only.  The corporation then operates the resort on the land it sub leases from you, using buildings you have built and therefore own.  If any of the Filipino partners in the corporation running the resort play funny games, you as the lease holder can terminate the contract to operate the resort with the corporation.  You would have it renewable year to year anyway to protect yourself.  You recover your 40% invested in the corporation but you retain the buildings and the lease on the land.  At the end of the lease period you are reimbursed for any improvements made to the land as provided by Philippine Law!

Leases can be a wonderful tool for a foreigner in the Philippines.  The trick is to negotiate up front all the clauses you need.  You can sub-let, so long as you include that in the original lease and the lessor agrees at that time  You can write anything in and it is binding so long as it isn’t illegal per se and the lessor agrees of their own free will.

Naturally, a smart investor would have the lease properly checked by a trusted attorney, unless they trust the lessor totally or more than they trust their attorney!  Keep everything written in plain English
and keep it simple and leasing should prove a viable alternative for those who really want their own block of dirt to do with as they wish, yet can’t legally own it.  Make sure the lease is fair to both parties and there is little chance of any dispute, even if it reached court, favouring one party over another purely because the lease itself is too heavily weighted in the other party’s favour.

For more information on real estate get our Philippines Property Primer e-guide

New Release from Streetwise Philippines

With over 20 years hands-on experience in the Philippines, Perry Gamsby is considered an authority on the facts of expatriate life in this fascinating archipelago.  As well as having a Filipina wife, four children and the requisite extended Filipino family, Perry is a teacher of Filipino Martial Arts and a former travel editor of the country’s leading map and travel atlas publisher. Five years ago he created Streetwise Philippines Inc. publishing eBook guides to the Philippines for expat readers.

His first book and to date, still the best seller, is “Philippine Dreams” (also sold in some markets as “StreetWise Philippines”). This comprehensive examination of the phenomenon of Filipinas, the Philippines and his own decision to move to the Philippines and pursue his dream of living in a tropical paradise strikes a chord with all who read it.  Written in an entertaining yet informative style, the eBook explores life and living in the Philippines in a special way: “This is what happens, this is why it happens, this is what you as an expat can do to understand what happens.” You can read more about Philippines Dreams at http://www.philippine-dreams.com/

“Philippine Dreams” created a demand for more information, especially about the four most important topics of the matrix:  meeting a Filipina, marrying and migrating a Filipina, putting a roof over your head if you decided to live in the Philippines and finding ways to pay for all of this!  The results were “Filipina 101-How To Meet The Filipina of Your Dreams” (co-written with his Filipina wife, Amelita) and “Filipina 202 – How To Marry And Migrate Your Dream Filipina”. These valuable guides dismiss the misinformation and stereotyping of the Filipina on the many online dating/matchmaking sites and provide a balanced and informative guide to men looking for Filipina wives.   You can read more about these guides at  http://www.filipina101.com and http://www.filipina202.com

Perry has completed ‘Filipina 303 – Making The Magic Last’ although at this stage it has not been decided if the eBook will be released separately or as part of a three volume compilation of the ‘Filipina’ series.

Perry then released “The Philippines Property Primer – The StreetWise Guide to Buying, Renting or Leasing Property”.  This is a ‘first read’ real estate guide for anyone contemplating buying, renting or leasing property in the Philippines.  Over the years, as well as buying, leasing and renting several properties himself in the Philippines, Perry has observed many people lose large amounts of money in property here; most of the time because they are not dealing with legitimate sellers or they have not protected their investment by taking the simple precautions listed in the eBook.  The Philippines Property Primer has all of the basic information you need to assist you in making a more informed decision.  You can read more about The Philippines Property Primer at http://www.philippinespropertyprimer.com/

THE LATEST RELEASE FROM STREETWISE PHILIPPINES

Although the topic of how to make a living in the Philippines was covered in brief in “Philippine Dreams”, the response from readers was so insistent that a new, updated and more in depth guide on how to support yourself and your family in the Philippines has been released.  “MAKING A LIVING IN THE PHILIPPINES – The StreetWise Guide To Business, Employment and Investing”, will tell you what you need to know to operate a small business, get a job or invest in a tightly regulated, highly competitive and immensely volatile marketplace.  It has been written with the average guy in mind; the everyday guy without the big retirement income set-up or pre-arranged ‘fatcat’ expat job contract who wants to escape to the Philippines and live every day with the Filipina of his dreams but still needs to make a living!

You can read more about “Making A Living In The Philippines” at http://www.makingalivinginthephilippines.com/ or check out all the Streetwise Philippines publications at http://www.streetwisephilippines.com/ The eBook, contains a wealth of information otherwise impossible to glean without having been there, done that.  In the safety of your own home you can learn first hand what is required to survive in a third world economy and be better equipped to decide if you should risk selling up and making that life changing move!

This E-Book will explain to you everything you need to know to start up a small business, get a job or invest in the Philippines!

The very latest publication is ‘Philippines Survival Handbook’ which takes a very holistic and comprehensive view of the things that can give you grief in the Philippines. From bent coppers to under-age girl scams, snakes and sea creatures to dangerous bus rides!

An Expat's Guide To Paradise Without The Rose Tinted Glasses!