Perez, Christian Andrew F. Strategic Management Paper PDF

EXECUTIVE SUMMARY
This Research Paper is focused on discussing the possible strategies that would assist and
improve DMCI Homes to improve its present standing in the market, as well as to enhance its
financial standing in the future. The strategies that are recommended by the researcher are derived
from the matrixes that would essentially suggest the best strategy for the business.
This paper includes a methodical process of acquiring every piece of data. It contains a
research and design methodology, a complete analysis of both external and internal forces, a
formulation of the strategy, the different actions necessary to finalize the proposed strategy, and
methods in order to maintain the suggested strategy.
The results of this paper show that DMCI Homes can either formulate its strategized based
on Forward, Backward, Horizontal Integration, Market Penetration Market Development and
Product Development. Where these strategies can improve the current position of DMCI Homes.
DMCI Homes – Strategic Management Paper Page 1

CHAPTER 1
INTRODUCTION AND BACKGROUND OF THE STUDY
1.1 COMPANY PROFILE
1.1.1 BRIEF HISTORY AND DESCRIPTION OF THE CORPORATION
David M. Consunji acquired the knowledge of construction when he was a young, concrete
inspector. He was armed with in-depth facts and the precise system of construction through his
Civil Engineering degree that he earned from the University of the Philippines. After some time,
he decided to eventually start his own contracting company.
He incorporated David M. Consunji Incorporated (DMCI) which was founded on
December 24, 1954, in a quaint room in Pandacan, Manila. He had a vision of "Building a
generation of Filipinos."
DMCI started building chicken houses for the Bureau of Animal Industry. This earned him
a reputation for timeliness of service delivery and punctuality and quality output. After that, the
Tacloban Coca-Cola Plant and Bacnotan Cement Plant projects were awarded to the company.
Through DMCI’s unwavering quest for progression, its development and research aspect
paved the way for the pioneering of several advanced construction application technologies in the
Philippines. Now, DMCI enjoys the patronage of both its new and repeat institutional clients.
In the year 1999, DMCI expanded with its housing division, which was called DMCI
Homes. Its aim was to build progressive condominiums and house and lots. It all began with Lake
View Manors (1999) followed by more innovations like Hampstead Gardens (2001). By the
beginning of the year 2003, DMCI Homes became stronger, more aggressive and even more
competitive. They constructed the East Ortigas Mansions and added more amenities and facilities
for its residents. Villa Alegre Homes and Mayfield Park were then erected in 2004 with more
improvements and amenities such as the installation of elevators.
As the company kept expanding its business operations, DMCI Homes grew as a household
name in the real estate industry. It began to carve itself a niche in the real estate business.
All in a span of seven years, DMCI Homes has built the most comfortable, resort-like
residential spaces for urban dwellers. The rapid growth rate of DMCI Homes can be attributed to
its thrust to continuously delight its customers. DMCI Homes will perpetually continue to create
modern residential spaces in the heart of the city on a budget.
The company's head office is in Bangkal, Makati, though it has several sales and property
management offices in Metro Manila. Isidro Consunji presides as the president of DMCI Homes.
He is also the president and Chief Executive Officer (CEO) of DMCI Holdings.
Figure 1: Map of Businesses Owned by DMCI Holdings

Through continuing research, DMCI became a pioneer in several advanced construction
application technologies in the Philippines. Taking this into account, DMCI enjoys the patronage
of both new and repeat institutional clients whose businesses have benefited from DMCI’s on-or-
ahead-of-schedule completion philosophy. The hundreds of landmark infrastructures constructed
by DMCI symbolize the expertise and professionalism of the Filipino engineer. Some of the
landmark infrastructures that DMCI built include:
• Solaire Resort & Casino (Entertainment City, Bay City, Paranaque City)
• SM Megamall (Mandaluyong City)
• Mactan Shangri-La Hotel (Mactan, Lapu-Lapu City, Cebu)
• Makati Shangri-La (Makati City)
• Shangri-La Resorts & Spa Boracay (Malay, Aklan)
• Manila Hotel (Rizal Park, Manila)
• Philippine International Convention Center (CCP Complex, Roxas Boulevard, Pasay City)
• The Westin Philippine Plaza/Sofitel (CCP Complex, Roxas Boulevard, Pasay City)
• Cultural Center of the Philippines Complex (Roxas Boulevard, Pasay City)
• Ayala Tower One (Makati City)
• The New Istana Palace (Sultan’s Palace, Brunei, Darussalam)
• The Asian Hospital (Filinvest Corporate City, Muntinlupa)

• The Manila Doctor’s Hospital (UN Avenue, Manila)
• NAIA Expressway Phase 2
• Metro Manila Skyway Stage 3 (Sections 1&2)
• LRT Line 2 East Extension (Masinag Extension)

1.2 RATIONALE OF THE STUDY
Real estate refers to producing, buying and selling real estate. The real estate industry is a
critical driver of economic growth. Real estate industry in the Philippines has been booming these
past few years and it is without a doubt that every Filipino aims to find a place of their own. As a
result, it aims to help the consumers which developer should they choose.
The construction and real estate sectors make up around 20% of the Philippine economy,
slightly ahead of manufacturing. Over the past few years, construction in the Philippines has been
flourishing amid a climate of political stability and upbeat business sentiment, spurred by growth
in overseas foreign worker remittances, inbound investments into business process outsourcing,
rising numbers of tourist arrivals, and government spending on large and small-scale
infrastructure. Positive trading conditions for the residential, office, retail and hospitality segments
point to robust demand for private – sector-led building.
The reasons for choosing DMCI Homes for this research are the following: First, is that
DMCI targets the middle-class and not the high-end. Second, DMCI Homes is under an umbrella
company of DMCI Holdings Incorporated which they engage in mining, construction, utilities
(Maynilad Water), real estate development (DMCI Homes) and energy (DMCI Power
Corporation). DMCI have diversified investments that continue to grow through the years. Third,
DMCI earned the rating of the very first Triple-A builder/developer in the country.

CHAPTER 2
RESEARCH DESIGN AND METHODOLOGY
2.1 DATA AND INFORMATION
2.1.1 RESEARCH DESIGN
Descriptive research is aimed at casting light on current issues or problems through a
process of data collection that enables them to describe the situation more completely than was
possible without employing this method. It is appropriate for this study since this strategic
management paper objects to analyze the current condition of the company.
The Historical research method was also used because it is important to examine the
historical data of the company to formulate strategies. This study involves a comparative analysis
of the company's performance during its past three years, therefore, historical research method was
used.
2.1.2 RESEARCH DATA
Pertinent information was gathered from different sources to be able to discuss all the
required discussion in this study. Sources such as news and articles (business world), industry
updates through websites, government publications regarding the real estate industry were used.
The research includes data collection of Financial Statements of DMCI Homes. DMCI Homes is
a wholly owned marketing subsidiary of DMCI Project Developer. For this paper, DMCI Project
Developers Inc and DMCI Homes will be synonymously referred to as DMCI Homes.

2.2 SCOPE AND LIMITATION
With the intention to comply and complete this paper, the researcher utilized the available
resources to measure and interpret the financial performance of the parties involved – that is
limited to the company's annual reports from the year 2014 to 2016, including ample information
gathered from the different sources.
The scope of this paper is limited to DMCI Homes' real estate ventures in the Philippines
and two of its other major competitors from the real estate industry namely: Filinvest Land Inc.
and Ayala Land. This paper is conducted to analyze and determine the market size and market
share of the players based on their revenue by comparing their performance to the industry
standards.

CHAPTER 3
EXTERNAL ANALYSIS
3.1 GENERAL ENVIRONMENT
3.1.1 POLITICAL AND GOVERNMENTAL FORCES
3.1.1.1 TAX REFORM ACCELERATION AND INCLUSION LAW (R.A 10963)
This Tax Reform is primarily focused on the support of infrastructure development and on
free education in state colleges and universities, universal health care, and free irrigation because
according to the 2018 General Appropriations Act, the size of the government budget will be 12%
higher than the 2017 National Budget. The 2018 National Budget for the Department of Public
Works and Highways (DPWH) amounting to Php 637.86 Billion. This plan of the government will
have a great impact to the real estate industry, wherein the time spent on the road may be reduced
because of public transportation and public roads which will later improve and will cause
consumers to live in their permanent residences rather than leasing condominiums.
3.1.2 ECONOMIC FORCES
3.1.2.1 GROSS DOMESTIC PRODUCT INCREASED BY 6.9% IN 2017
Gross Domestic Product (GDP) grew by 6.9 percent in the third quarter of 2017.
Manufacturing, Trade, and Real Estate Renting and Business Activities were the main drivers of
growth for the quarter. The Service Sector is the largest sector in the Philippine Economy which
accounts for 57% of the total GDP, inside the service sector are its important segments which are:
trade , repair of motor vehicles and household goods (17 percent of total GDP); real estate, renting
and business activities (11 percent); transport, storage and communication (8 percent); financial
services (7 percent) and public administration, defense and social security (4 percent) Industry
accounts for 31 percent of GDP. Within the industry, manufacturing (22 percent of total GDP) and
construction (5 percent) are the most important.
3.1.2.2 REAL ESTATE, RENTING, AND OTHER BUSINESS ACTIVITIES (RERBA)
SLOWS DOWN
RERBA posted a 7.7 percent growth in the third quarter of 2017, slower than the 8.9
percent growth recorded in the third quarter of the previous year. The growth was driven by
Renting and Other Business Activities which grew by 11.0 percent as compared with the 13.1
percent growth in the same period of the previous year. Meanwhile, Real Estate expanded by 7.7
percent, slower compared with the 9.7 percent growth recorded in 2016.
3.1.2.3 TOURISM DRIVEN DEMAND
The growing number of tourists in the Philippines boosted the interest of OFWs to invest
in the tourism industry by investing in condotel developments.
Local tourism alone is growing especially with budget fares now offered by various airline
companies. Meetings, family vacations, company incentives and conventions also contribute to
the strong demand for accommodation needs. Whenever there are tourists, there is also a great
demand for accommodations.
3.1.2.4 RISING BUSINESS PROCESS OUTSOURCING IN THE PHILIPPINES
With the emerging industry, the real estate industry could benefit from these since most
BPOs are situated in the Metro, BPO workers would choose to rent or to buy units near the area.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 10
Also, the area of the market will probably become popular with investors who can purchase
these units to rent them out to BPOs workers or as halfway houses.
That is the reason why property developers are really focusing on building low-end
apartments in the metropolitan, those with average monthly rents of P8,000 ($167.1) where mid-
scale BPO workers can rent.
3.1.3 SOCIAL, CULTURAL AND DEMOGRAPHIC FORCES
3.1.3.1 EMPLOYMENT, UNEMPLOYMENT AND UNDEREMPLOYMENT RATES
The employment rate in January 2018 was estimated at 94.7%. In January 2017, the
employment rate was 93.4%. The labor force participation rate (LFPR) in January 2018 was
estimated at 62.2% given the population 15 years old and over of 70.9 million. The LFPR in
January 2017 was 60.7%. The labor force population consists of the employed and the unemployed
15 years old and over.
Workers were grouped into three broad sectors, namely, agriculture, industry, and services
sector. Workers in the services sector comprised the largest proportion of the population who are
employed. These workers made up 55.9% of the total employed in January 2018. Among them,
those engaged in the wholesale and retail trade; repair of motor vehicles and motorcycles
accounted for the largest percentage of workers in the services sector. In January 2017, workers
in the services sector accounted for 57.1% of the total employed, with those engaged in the
wholesale and retail trade; repair of motor vehicles and motorcycles making up the largest
proportion of workers. The January 2018 LFS results also showed that in the industry sector,
workers in the construction and manufacturing subsectors made up the largest groups, accounting
for 48.2% and 47.0% of the workers in these subsectors, respectively.
Employed persons fall into any of these categories: (1) wage and salary workers, (2) self-
employed workers without any paid employee, (3) employers in own family-operated farm or
business, and (4) unpaid family workers. In January 2018, the wage and salary workers made up
61.7% of the total employed, with those working in private establishments continuing to account
for the largest share. They made up 48.7% of the total employed in January 2018 and 49.1% in
January 2017. The second largest class of workers were the self-employed making up 27.7% of
the total employed in January 2018 while it was 27.2% in January 2017. Unpaid family workers
accounted for 6.9% of the total employed in January 2018 and 6.3% of the total employed in
January 2017.
The unemployment rate in January 2018 was estimated at 5.3%. The unemployment rate
in January 2017 was 6.6%. Among the regions, NCR (7.8%), Ilocos Region (6.7%), and
CALABARZON (6.7%) were the regions with the highest unemployment rates.
Among the unemployed persons in January 2018, 65.5% were males. Of the total
unemployed, the age group 15 to 24 years comprised 43.2% while the age group 25 to 34, 31.1%.
By educational attainment, 21.9% of the unemployed were college graduates, 13.7% were college
undergraduates, and 29.4% have completed junior high school. Graduates of junior high school
include those high school graduates in the old curriculum.
3.1.3.2 LIFESTYLE
Despite stubbornly high levels of income inequality, the middle class is expanding, driving
increased demand for a wide range of modern products and services. Both average disposable
income and consumer expenditure have increased, particularly among younger, educated urban
households. Younger consumers have also helped drive the considerable growth of internet and
mobile internet retailing. The increasing number of single-person and smaller households is
boosting demand for compact household items.
The country’s 7,641 islands offer plenty of lifestyle choices for expats who want to live
there. Rural farmhouses, condominiums, and rooms in shared apartments are all available. As is
the case almost everywhere in the world, housing is not as widely available in urban centers. The
rent is also higher than in remote rural areas.
The rents are highest in Metro Manila. The best and safest way to find a place to stay during
your expat life in the Philippines is through recommendations from friends and colleagues. Internet
listings like Philippines Properties and classified ads in local newspapers are also great ways to
start. The typical lease for upper-end apartments in the Philippines lasts twelve months, and you
are usually expected to pay rent for the entire year in advance with postdated checks. Shorter
contracts are not common for these types of rentals.
3.1.3.3 MORE YOUNG PROFESSIONALS TEND TO HAVE PROPERTY PURCHASING
ABILITY
A more visible effect is seen in the residential property division. Mid-end condominium
market grew as more young professionals tend to have property purchasing ability. Higher income
in the BPO workforce has become the target of property developers. BPO employees are usually
single and residential units such as studio-type ones are more preferred. This workforce (in BPO)
is potentially seen to be ‘the upgraders' soon by the time they get into marriage. Residential unit
renting also make up a great part of the property industry and is a great support in the demand of
the residential market.
3.1.4 NATURAL ENVIRONMENT FORCES
3.1.4.1 CROWDED METRO MANILA
Metro Manila is one of the world’s most densely populated urban conurbations. In fact, at
43,079 inhabitants per square kilometer, Manila proper alone is the world’s most densely
populated city, according to Forbes. Notorious for traffic jams, Manila was also ranked by Forbes
as the world’s most congested city.
3.1.4.2 METRO MANILA IS LOSING ITS GREEN AREAS
Since people prefer to live in the area, more infrastructures are being built for the demand
which results in lesser green areas since it is being replaced by condominiums, subdivisions, and
the likes.
3.1.4.3 METRO MANILA IS VERY VULNERABLE TO NATURAL CALAMITIES
The Philippine capital sits on an active fault line, putting us at risk for earthquakes and
tsunamis, and the country lies on the firing line of typhoons forming in the northwest Pacific Basin.
There can be no guarantee that the occurrence of such natural calamities will not substantially
interrupt the Corporation’s operations. These factors, which are not within the Corporation’s
control, could potentially have substantial effects on the Corporation’s housing and land
development projects, many of which are large, complex estates with infrastructure, such as
buildings, roads and perimeter walls, which are susceptible to damage.
3.1.4.4 ENHANCED RISK OF FLOODING IN KEY METROPOLITAN AREAS IN

MANILA WHICH ARE DEEMED BELOW SEA LEVEL
None of DMCI Homes' developments were severely affected during the typhoon
"Yolanda". DMCI had the foresight to choose less flood prone areas and invest in a good drainage
system for all its development, as “Metro Manila can never be flood-free”, as the former MMDA
Chairman Francis Tolentino said.
3.1.5 LEGAL FORCES
3.1.5.1 MACEDA LAW
Republic Act No. 6552, also known as the "Realty Installment Buyer Protection Act" and
more commonly known as the "Maceda Law" is an act to protect real estate buyers with regards
to installment payments. Since installment payments and real estate transactions need to have a
clear set up between the buyer and developer, the law clearly states the time frame when the
installment payments should be made. The law also states that the seller can cancel the contract if
the buyer is not able to settle the installment payments once the grace period expires after the buyer
receives the notice of cancellation.
3.1.5.2 PRESIDENTIAL DECREE NO. 957 (SUBDIVISION AND CONDOMINIUM
BUYERS’ PROTECTIVE DECREE)
The Subdivision and Condominium Buyers' Protective Decree", Presidential Decree No.
957 (P.D. 957) aims to help buyers know their real estate rights, especially if the sellers and
developers seem to be engaged in fraudulent activities. This is primarily important since most
sellers will do any scheme just to sell their condominiums and land properties such as false
advertisements telling that there is "no down payment". Developers should only present real facts
in their promotional materials when selling their units. "No down payment" simply means that no
lump sum money is required to pay for the unit since the down payment price is distributed among
the allowable term set by the developers for their condo project.
If developer or seller reverses their registration certificate and their license to sell, the buyer
can file a complaint, provided it is under the grounds of having a bad business reputation, being
involved in fraudulent transactions, and does not conduct their business practices according to the
law.
A common problem for most buyers is the delayed turnover of their condominiums. P.D.
957 states that buyers can halt their payment after giving due notice to the developers and acquiring
clearance from the Board, and they can also ask for the reimbursement of their total payment
including amortization interests.
3.1.5.3 REPUBLIC ACT NO. 4726 (THE CONDOMINIUM ACT)
The Condominium Act”, also known as the Republic Act No. 4726 (RA 4726) is an act “to
define condominium, establish requirements for its creation, and govern its incidents”. Enacted on
June 18, 1966, this act allows people the right to co-own lands, aside from their absolute ownership
of their unit. This act further explains the extent of their influence when it comes to the unit that
they purchased. The rights of the buyers are well-explained to ensure that developers or sellers do
not abuse or mislead them when it comes to their units.
Included in the provisions are common areas regulations, and the exclusive rights of a
condo owner, such as refinishing or decorating his own unit, and to sell or dispose his unit unless
there is a master deed which indicates that the property must be offered to other unit owners before
it is offered to other interested buyers. The act also allows foreign nationals to acquire units if they
do not own the land where their unit is built.
3.1.6 TECHNOLOGICAL FORCES
3.1.6.1 INCREASING SECURITY BY IMPLEMENTING THE USE OF ELECTRONIC
KEY PASSES
Since some competitors are already making use of electronic key passes, DMCI should
employ the use of electronic key passes to improve the security of their property vicinity since it
is easy for unauthorized persons to enter the building instead of continuing the use of manual
logbook where people can easily fake their identity names and it will also be difficult for security
personnel to identify whether these persons entering are really tenants or owners in the building.
They should also make use of electronic key passes in their parking areas so that there is no
difficulty in identifying if the vehicles are used by the condo owners/tenants.
3.1.6.2 CREATION OF A MOBILE APP
Since majority of the Filipinos are using smartphones, they should create a mobile app
where prospective buyers can see details of certain properties such as the places where
condominiums are located, prices of the units, and a list of agents that they can contact or through
the app in which they can talk to a representative for their inquiries.
3.1.6.3 DEVELOPERS AND AGENTS HAVE FOUND VALUE IN INCREASING THEIR
BRAND’S VISIBILITY AND BOOSTING QUALITY TRAFFIC THROUGH SOCIAL
MEDIA
From the evolving social media, it will be easier for developers and agents to have a greater
opportunity to advertise the properties. For instance, agents can simply make a blog and post
details about the properties, they can post at buy-and-sell sites, or simply post it on social
networking sites which are usually free unless you pay for the advertisement for more exposure.
3.2 INDUSTRY AND COMPETITOR ANALYSIS
3.2.1 PORTER’S FIVE FORCES
FORCES
Rivalry among competing firms Strong force
Potential entry of new competitors Weak force
Bargaining power of consumers Weak force
Potential development of substitute Strong force
products
Bargaining power of suppliers Moderate force
3.2.1.1 RIVALRY AMONG COMPETING FIRMS – STRONG

DMCI Homes’ real estate ventures in the Philippines and two of its other major competitors
from the real estate industry namely: Filinvest Land Inc. and Ayala Land.
With over a century of envisioning, building, and developing master planned, mixed-use,
and sustainable communities, Ayala Land's rich history, and illustrious reputation remain
unparalleled in the country. It leads the industry in raising the standard of commitment to
innovation and value appreciation. It stands for trailblazing quality. Considered as one of the
largest residential areas here in the Philippines which is known with their high standards when it
comes to quality of life and now over 27 communities were established as the company
continuously "Enhancing and enriching lives for more people."
FLI is a pioneer in the development of very large master-planned township developments
which provide a convenient mix of commercial, industrial and residential uses.
FLI currently has over 150 projects located in 48 cities and municipalities nationwide. The
Company has an extensive network of sales offices, in-house sales agents and independent brokers
located throughout the Philippines, as well as accredited brokers in countries and regions with
large Overseas Filipino Workers (OFW) and expatriate Filipino populations (such as Japan, Italy,
the United Kingdom and the Middle East). Approximately half of FLI’s real estate sales are
directly or indirectly derived from Overseas Filipinos (OFs).
KEY PERFORMANCE INDICATORS (KPI)
DMCI Homes Filinvest Land Ayala Land
Gross Profit Margin 58.59% 49%
Operating Profit Margin 31.07% 44%
Net Profit Margin 21.49% 30%
Return on Assets 4.73% 4%
Return on Equity 14.6% 9%
Earnings per Share Php 0.636 Php 6.95
3.2.1.2 POTENTIAL ENTRY OF NEW COMPETITORS – WEAK
The industry is capital intensive which requires continuous land acquisitions and
construction of buildings. A new entrant should have to have a minimum capital expenditure
budget of 32.5 billion pesos to level its corporation to the existing real estate developers like
AyalaLand, Inc., DMCI Homes, and Filinvest Land Inc.
Total Capital Expenditures in 2016 (in Billions)
DMCI Homes Php 32.5B
Ayala Land Inc. Php 85B
Filinvest Land Inc. Php 20B
DMCI Homes allocated around P27.5 billion will be used for the total development cost of
new projects. The remaining P 5 billion will fund land acquisitions.
3.2.1.3 BARGAINING POWER OF CONSUMERS – WEAK
Real estate is measured as one of the high-cost inventories, together with automobiles, thus,
the ability to acquire in large amount prevents the developers to profit in an instant to think that
there is a need to surmount the expense incurred. Plus, the fact that our culture of being a family-
oriented where even extended families are accommodated in one place can make some of the
buyers whose capable of purchasing become cautious in deciding whether to buy or not.
3.2.1.4 POTENTIAL DEVELOPMENT OF SUBSTITUTE PRODUCTS –

STRONG
Property offerings of residential developers such as greater number of options for financial
products with flexible terms that potential buyers may avail rent to own spaces depending on their
choice are more convincing to avail while considering the locations are mostly within the
commercial areas targeting those employees to somehow lessen their travel time and cost for their
allowances.
As compared if the house and lot is to acquire, it is not burdensome at some point when it
comes to the cash flow of the buyer; only the deposit for three months, one month advance as the
tenant enters into a contract then the monthly rate afterwards, as a standard requirement, unlike
down payment that roughly ranges 10 to 30% of its current price and its installment payment with
interest depends on the term of payment.
3.2.1.5 BARGAINING POWER OF SUPPLIERS – MODERATE
Construction services and raw materials such as cement and metals are the main
compositions of the company's cost aside from parcels of land. The prices are dictated by the world
market, only monitored, and will not vary as to the location of the construction site but rather the
competition in the raw materials and construction services due to numerous providers and
contractors.
3.3 SUMMARY AND CONCLUSION

3.3.1 EXTERNAL AND EVALUATION MATRIX
External Factor Evaluation Matrix
Key External Factors Weight Rating Weighted Score
Opportunities
a. Rising number of BPOs in Metro Manila .11 4 .44
b. Young investors capacity to spend .10 3 .30

c. Increase in labor force participation .08 3 .24
d. Tourism-driven demand .11 4 .44
e. Increase in GDP by 6.9% .05 3 .15

f. Brand Visibility through social media .10 3 .30
Threats
a. Climate Change .09 3 .27
b. Congestion and Traffic in Mega Manila .08 3 .24
c. Risk of flooding in Metro Manila .09 3 .27
d. Tax Reform effected in 2018 .09 4 .36
e. RERBA slows down by 7.7 % .10 3 .30
TOTAL 1 3.31
OPPORTUNITIES
1. RISING NUMBER OF BPO’S IN METRO MANILA
With the emerging industry, the real estate industry could benefit from these since most
BPOs are situated in Metro Manila, BPO workers would opt to rent or to buy units near the area.
Also, the area of the market will probably become popular with investors who can purchase these
units to rent them out to BPOs workers or as halfway houses.
That is the reason why property developers are really focusing on building low-end apartments in
the metropolitan, those with average monthly rents of P8,000 ($167.1) where mid-scale BPO
workers can rent.
2. YOUNG INVESTORS CAPACITY TO SPEND

Mid-end condominium market grew as more young professionals tend to have property
purchasing ability. Higher income in the BPO workforce has become the target of property
developers. BPO employees are usually single and residential units such as studio-type ones are
more preferred. Residential unit renting also make up a great part of the property industry and is a
great support in the demand of the residential market.
3. INCREASE IN LABOR FORCE PARTICIPATION

The employment rate in January 2018 was estimated at 94.7%. In January 2017, the
employment rate was 93.4%. The labor force participation rate (LFPR) in January 2018 was
estimated at 62.2% given the population 15 years old and over of 70.9 million. The LFPR in
January 2017 was 60.7%. The labor force population consists of the employed and the unemployed
15 years old and over.
The unemployment rate in January 2018 was estimated at 5.3%. The unemployment rate
in January 2017 was 6.6%. Among the regions, NCR (7.8%), Ilocos Region (6.7%), and
CALABARZON (6.7%) were the regions with the highest unemployment rates.
Among the unemployed persons in January 2018, 65.5% were males. Of the total
unemployed, the age group 15 to 24 years comprised 43.2% while the age group 25 to 34, 31.1%.
By educational attainment, 21.9 %of the unemployed were college graduates, 13.7% were college
undergraduates, and 29.4% have completed junior high school. Graduates of junior high school
include those high school graduates in the old curriculum.
4.TOURISM-DRIVEN DEMAND
The growing number of tourists in the Philippines boosted the interest of OFWs to invest
in the tourism industry by investing in condotel developments.
Local tourism alone is growing especially with budget fares now offered by various airline
companies. Meetings, family vacations, company incentives and conventions also contribute to
the strong demand for accommodation needs. Whenever there are tourists, there is also a great
demand for accommodations.
5. INCREASE IN GDP BY 6.9%
Gross Domestic Product (GDP) grew by 6.9 percent in the third quarter of 2017.
Manufacturing, Trade, and Real Estate Renting and Business Activities were the main drivers of
growth for the quarter. The Service Sector is the largest sector in the Philippine Economy which
accounts for 57% of the total GDP, inside the service sector are its important segments which are:
trade , repair of motor vehicles and household goods (17 percent of total GDP); real estate, renting
and business activities (11 percent); transport, storage and communication (8 percent); financial
services (7 percent) and public administration, defense and social security (4 percent) Industry
accounts for 31 percent of GDP. Within the industry, manufacturing (22 percent of total GDP) and
construction (5 percent) are the most important.
6. BRAND VISIBILITY THROUGH SOCIAL MEDIA

From the evolving social media, it will be easier for developers and agents to have a greater
opportunity to advertise the properties. For instance, agents can simply make a blog and post
details about the properties, they can post at buy-and-sell sites, or simply post it on social
networking sites which are usually free unless you pay for the advertisement for more exposure.
THREATS
1. CLIMATE CHANGE
There can be no guarantee that the occurrence of such natural calamities will not
substantially interrupt the Corporation’s operations. These factors, which are not within the
Corporation’s control, could potentially have substantial effects on the Corporation’s housing and
land development projects, many of which are large, complex estates with infrastructure, such as
buildings, roads and perimeter walls, which are susceptible to damage.
2. CONGESTION AND TRAFFIC IN MEGA MANILA
Metro Manila is one of the world’s most densely populated urban conurbations. In fact, at
43,079 inhabitants per square kilometer, Manila proper alone is the world’s most densely
populated city, according to Forbes. Notorious for traffic jams, Manila was also ranked by Forbes
as the world’s most congested city.
3. RISK OF FLOODING IN METRO MANILA
None of DMCI Homes' developments were severely affected during the typhoon
"Yolanda". DMCI had the foresight to choose less flood prone areas and invest in a good drainage
system for all its development, as “Metro Manila can never be flood-free”, as the former MMDA
Chairman Francis Tolentino said.
4. TAX REFORM EFFECTED IN 2018
This Tax Reform is primarily focused on the support of infrastructure development and on
free education in state colleges and universities, universal health care, and free irrigation because
according to the 2018 General Appropriations Act, the size of the government budget will be 12%
higher than the 2017 National Budget. The 2018 National Budget for the Department of Public
Works and Highways (DPWH) amounting to Php 637.86 Billion. This plan of the government will
have a great impact to the real estate industry, wherein the time spent on the road may be reduced
because of public transportation and public roads which will later improve and will cause
consumers to live in their permanent residences rather than leasing condominiums.
5. RERBA SLOWS DOWN BY 7.7 %
RERBA posted a 7.7 percent growth in the third quarter of 2017, slower than the 8.9
percent growth recorded in the third quarter of the previous year. The growth was driven by
Renting and Other Business Activities which grew by 11.0 percent as compared with the 13.1
percent growth in the same period of the previous year. Meanwhile, Real Estate expanded by 7.7
percent, slower compared with the 9.7 percent growth recorded in 2016.
3.3.2 COMPETITIVE PROFILE MATRIX
Competitive Profile Matrix

DMCI Homes Ayala Land Filinvest Land
Critical Success Factors Weight Rating Score Rating Score Rating Score
Price Competitiveness .05 3 .15 3 .15 3 .15
Target Market .10 4 .40 4 .40 4 .40
Capitalization .10 1 .10 3 .30 2 .20
Overall Project Quality .15 4 .60 4 .60 3 .45
Design Innovation .20 4 .80 3 .60 3 .60
Consumer Loyalty .05 4 .20 4 .20 4 .20
Location .15 3 .45 4 .60 4 .60
Product and Service Quality .15 4 .60 4 .60 4 .60
Advertisement .05 1 .05 3 .15 1 .05
Total 1 3.35 3.40 3.25
From the identified critical success factors in the industry, DMCI Homes and its key
competitors were assigned the following ratings (from 1-4, 4 being the strongest). The table above
shows the Competitive Profile Matrix of DMCI Homes and its competitors based on the
researcher’s ratings.
Based from the CPM ratings, Ayala Land is labeled as the overall to player. It has a
competitive advantage over DMCI and its other competitors. Ayala Land’s strength over the rest
of the competitors is in the areas of Capitalization, Location, Advertisements, and Consumer
Loyalty. DMCI Homes’ overall CPM rating was lower due to its weak capitalization,
advertisements, and consumer loyalty.
CHAPTER 4
COMPANY ANALYSIS
COMPANY’S VISION AND MISSION STATEMENT
4.1 VISION, MISSION STATEMENT, AND CORE VALUES
4.1.1 VISION STATEMENT
To be an exceptional residential real estate holding company in the Philippines, committed
to providing the utmost quality of service that promotes a convenient lifestyle and wholesome
community by sustainably satisfying the ever – constant changing customer needs.
4.1.2 MISSION STATEMENT
DMCI Homes is the country’s first Triple A builder/developer of premium quality, urban-
friendly, fully serviced communities for the underserved young families of modest income that
aspire to live comfortably near their place of work, of study and of leisure.
We shall be the best provider of residential communities designed to create quality lifestyle
responsive to the changing needs and preferences of the market we serve...
In so doing, we are committed…
to ensure customer satisfaction
to achieve a sustainable growth on our shareholders’ investment
to maintain a mutually beneficial relationship with our partners in the business
to care for the environment, we work in
to promote the growth of our people
While building an organization that espouses Integrity, Excellence, and Interdependence.
4.1.3 CORE VALUES
INTEGRITY EXCELLENCE
All our actions are guided by what is ethical, We reject mediocrity and strive for
fair, and right. Believing in profit with excellence in even the smallest of details.
honor, we are committed to good
governance and the highest moral standards.
INTERDEPENDENCE CUSTOMER ORIENTATION

With unity in purpose and mutual trust and Our goal is to delight and please our
respect for each other, we work toward customers. Thus, all activities and programs
we undertake result in innovative projects
shared aspirations and transcend boundaries and in the enhancement of productivity and
along functional and organizational lines. quality.
4.2 REVIEW OF THE EXISTING VISION AND MISSION
4.2.1 VISION STATEMENT
Parameter Y/N Why?
Does it clearly answer the Y To become and exceptional real estate

question: What do we want to holding company in the Philippines.
become?
Is it concise enough yet Y To create quality lifestyle responsive to the

inspirational? changing needs and preferences of the market
that they serve.
Does it give a clear indicati on Y Businesses are in a going concern principle;

as to when it should be its vision and mission should be continuous
attained? as to its action.
4.2.2 MISSION STATEMENT
Parameter Y/N Why?
CUSTOMERS: Who are the Y “for the underserved young families of

firm’s customers? modest income that aspire to live comfortably
near their place of work, of study and of
leisure”
PRODUCTS OR SERVICES: Y "builder/developer of premium quality,

What are the firm’s major urban-friendly, fully serviced communities"
products or services?
MARKETS: Geographically, N The Mission statement does not indicate what

where does the firm compete? market should they target.
TECHNOLOGY: Is the firm Y It uses current technologies for its operations.
technologically current?
CONCERN FOR Y “to achieve a sustainable growth on our

SURVIVAL, GROWTH, shareholders’ investment”
AND PROFITABILITY: Is
the firm committed to growth
and financial soundness?
PHILOSOPHY: What are the Y While building an organization that espouses

basic beliefs, values, Integrity, Excellence, and Interdependence”
aspirations and ethical
priorities of the firm?
SELF-CONCEPT: What is Y “DMCI Homes is the country’s first Triple A

the firm’s distinctive builder/developer”
competence or major
competitive advantage?
CONCERN FOR PUBLIC Y “to maintain a mutually beneficial

IMAGE: Is the firm relationship with our partner in the business”
responsive to social,
community and
environmental concerns?
CONCERN FOR Y "to promote the growth of our people"

EMPLOYEES: Are
employees an asset of the
firm?
4.3 MANAGEMENT
4.3.1 PLANNING
As a company of innovative builders and engineering experts that develop modern day
living solutions for urban families, DMCI Homes adopts and implement a business plan. Strategies
of DMCI Homes are aligned to that of DMCI Holdings so that synergy between DMCI Homes
and its parent company will be fully capitalized.
4.3.2 ORGANIZING
About the company’s decision structure, top-bottom structure is adopted. This structure
allows the upper management to make major decisions through the recommendations and
information provided by lower-level managers. Accordingly, lower level managers get involved
in the decision-making process through business planning sessions were done twice a year
involving all levels of management. Action points and departmental goals from the meeting are
delegated to specific departments and managers, which are held accountable for their performance
evaluations.
Name Position
Isidro A. Consunji Chairman, President, and Chief Executive Officer
Herbert M. Consunji CFO, Executive Director, and Chief Compliance

Officer
Maria Luisa C. Austria Administration and Accounting Officer
Luz Consuelo A. Consunji Non – Executive Director
Jorge A. Consunji Non – Executive Director
Cesar A. Buenaventura Vice Chairman
David M. Consunji Chairman Emeritus
Victor A. Consunji Non – Executive Director
Maria Edwina C. Laperal Treasurer and Executive Director
Victor S. Limlingan Managing Director and Investor Relations Contact
Cherubim O. Mojica Corporate Communications Officer
Tara Ann C. Reyes Investor Relations Officer
Noel A. Laman Secretary
Honorio O. Reyes Lao Independent Director
Antonio Jose Uy Periquet Independent Director
4.3.3 MOTIVATING
To motivate employees, DMCI Homes makes sure that the high potential employees stand
recognized publicly through service excellence awards. To retain talent, the company provides a
total compensation package. The working environment is also managed through several activities
such as company sponsored events to encourage teamwork and to promote work-life balance.
These motivational factors cause low attrition rates.
4.3.4 STAFFING
Measurable company objectives and goals are communicated as early as training stages or
upon hiring of new employees through manuals and an employee orientation program. The
company also uses an internal website (Intranet) thus; vision, mission, core values and other
organizational information are communicated. Furthermore, strategies are communicated down
the line by each group’s respective Department or Division Head.
4.3.5 CONTROLLING
The company ensures that job descriptions are well defined, showing the knowledge and
skills needed, as well as the specific duties of a position. Annual performance evaluations are also
done for managers to be able to measure the productivity or achievements of each employee, to
have the opportunity to direct the behavior of each employee towards the execution of the
established objectives. Retention strategy which involves employee development, recognition,
compensation and managing company culture is also significant to the company. Employee
development includes classroom training and, on the job mentoring and coaching.
MANAGEMENT AUDIT CHECKLIST
Checklist YES/NO Explanation

• Are the company Yes It is brief in the organization
objectives and goals chart that all offices are well
measurable and well communicated
communicated?
• Do managers at all Yes Most of the officers of the
hierarchical levels plan corporation belong to one
effectively? family, therefore, the power of
each office is respected and
well effective.
• Do managers delegates Yes The corporate organizational
authority well? chart is clear and strictly
implemented
• Is the organization’s Yes The position mostly belongs to
structure appropriate? a family, so there is a great
chance of being fraudulent.
• Are job descriptions Yes The position and its job are in
and job specifications the bylaws of the corporation
clear?
• Is employee morale Yes DMCI Homes provides
high? employee benefits and salary
packages, because it believes
that these are in line with the
industry standards in the
Philippines which are designed
to help it compete in the market
for quality employees.
4.4 MARKETING
4.4.1 CUSTOMER ANALYSIS
DMCI Homes is a Triple-A builder with a strong commitment to quality. It provides
middle-class Filipino families with residential communities that create a quality lifestyle. DMCI
Homes residences provide high-definition photos which highlight the unique amenities that their
condominiums offer. They may not have enough television advertisements but when you visit their
website, you will be surprised with great photos of their residential units. The company believes
that great photos not only attract potential tenants, they are also more likely to be shared on social
media.
4.4.2 PRODUCT AND SERVICE PLANNING
DMCI Homes’ residential communities are strategically situated near malls, schools,
hospitals, and government offices, DMCI Homes’ residential communities make living hassle-free
and convenient. They are easily accessible by public transportation.
4.4.3 DISTRIBUTION
DMCI Homes distribute their products via internal and external brokers. For buyers’
convenience, there is an available website provided for them to easily find DMCI Homes that are
for rent or for sale. The website has categorized property features to make it easier to compare.
DMCI Homes only contract sales professionals who have undergone the Foundation
Training. Only those who successfully pass the Accreditation Exam and the Oral Revalidation
Exercise will be contracted and be allowed to market its projects.
DMCI Homes is proud of its top-caliber sellers. The Elite Club is an exclusive list of top
sellers who have delivered unit sales beyond their quota.
4.4.4 PRICING
Price and payment terms for DMCI Homes differ due to some factors like location and
size. Usually, 30% minimum down payment and a 20% minimum down payment payable over the
construction period is required for a High – rise condominium unit and Mid-rise condominium
unit, respectively, with a reservation fee of Php 20,000 for the unit and a Php 10,000 for the parking
(optional unless parking is required). The balance may be settled through cash, in-house financing,
with a maximum term of 10 years or External financing through accredited partner banks or PAG
– IBIG financing.
Projects of DMCI Homes have flexible payment schemes offered with partner-banks
(Banco de Oro, United Coconut Planters Bank, Philippine National Bank, BPI Family Savings
Bank) and PAG – IBIG financing which is applicable only for RFO (ready for occupancy) projects.
As a fast-growing residential property developer focusing on the middle-income market,
affordability is the key. Since DMCI Homes is both builder and developer, it has full control of
the project quality and schedules, thereby giving clients a product of high quality and timely
turnover with prices that are competitive and within reach of the middle-income market.
4.4.5 MARKETING RESEARCH
DMCI has been awarded as the contractor-developer of AFP Off-Base housing that
includes master planning, design, construction, and marketing. DMCI Homes employ a Marketing
Research Analyst who is held responsible for conducting feasibility and competing market
scenario, conduct studies, monitor industry and competition news and manage customer database
processing with analysts results, the company will be able to monitor market trends.
Checklist YES/NO Explanation

• Are markets Yes The target market of DMCI
segmented Homes which is the low and
effectively? middle-class earners is
efficiently segmented.
• Is the organization Yes According to surveys, DMCI
positioned well among Homes has the best value for
competitors? money.
• Has the firm’s market Yes The Market share of DMCI
share been increasing? Homes is growing year by
year.
• Are present channels Yes DMCI Homes have been
of distribution reliable doing good in distributing its
and cost-effective? services nationwide through
their agents/ brokers.
• Does the firm have an Yes DMCI Homes hires
effective sales additional third-party agents
organization? who are based on branches to
focus on acquiring new
clients
• Does the firm conduct Yes DMCI Homes continues to
market research? research possible land bank
that may acquire
• Are the product Yes DMCI Homes offer high-
quality & customer quality products and provide
service good? excellent customer service
• Are the firm’s Yes The prices of DMCI Homes
products and services is quite lower than their
priced appropriately? competitors.
• Does the firm have an Yes DMCI Homes focus on
effective promotion, Billboards, social media and
advertising, and through online
publicity strategies? advertisements.
• Are the marketing, Yes DMCI Homes successfully
planning, and implements their planning
budgeting effective? and budgeting.
• Do the firm’s Yes DMCI Homes managers are
marketing managers well educated and well
have adequate attached to the suppliers as
experience and well as to the government.
training?
• Is the firm’s Internet Yes DMCI Homes presence is
presence excellent as active on the internet using
compared to rivals? their website
4.5 FINANCE/ ACCOUNTING
4.5.1 FINANCIAL STATEMENTS
Balance sheet
2014 2015 2016
ASSETS
Current Assets:
Cash and cash equivalents 2,756,384,808 5,679,429,701 3,868,999,775
Financial assets at fair value 74,530,000 - -

through profit or loss
Receivables - net 5,837,208,402 5,296,442,309 5,686,986,231
Real Estate Inventories 24,234,512,281 28,379,911,517 31,622,758,783
Other current assets 1,386,719,987 1,665,415,120 2,187,162,918
TOTAL CURRENT ASSETS 34,289,355,478 41,021,198,647 43,365,907,707
Noncurrent Assets:
Noncurrent receivables 2,836,006,407 3,168,835,402 2,300,542,230
Net Pension Asset 68,525,781 - -
Investments in associates, 278,835,751 320,969,268 341,194,947

joint ventures and others
Investment properties 158,523,614 229,502,655 155,125,788
Property, plant and 1,055,727,336 1,103,558,815 1,053,940,342

equipment
Software Cost 71,292,253 85,412,461 77,491,126
Deferred tax assets – net 3,216 2,900 -
Other noncurrent assets 264,797,837 283,734,520 252,242,006
TOTAL NON-CURRENT 4,733,730,195 5,192,016,021 4,180,536,439
ASSETS
TOTAL ASSETS 39,023,085,673 46,213,214,668 47,546,444,146
LIABILITIES AND EQUITY
Current Liabilities:
Accounts and other payables 1,259,409,508 1,418,681,904 1,245,917,952
Customers’ advances and 5,404,412,817 5,647,171,901 9,178,277,946

deposits
Payable to related parties 530,440,644 550,684,260 232,799,388
Dividends Payable - 100,000,000
Current portion of long-term 461,490,756 5,601,570,092 861,234,841

debt
Current Portion of Liabilities 1,865,351,506 2,201,291,422 623,150,513

for purchase land
TOTAL CURRENT LIABILITIES 9,521,105,231 15,419,399,579 11,241,380,640
Noncurrent Liabilities:
Long-term debt - net of 15,736,245,438 13,589,491,438 17,479,587,785

current portion
Liabilities for purchased land 312,929,207 816,135,420 906,622,242

- net of current portion
Pension liabilities - net - 325,498 53,079,093
Deferred tax liability 1,434,626,384 2,008,909,675 2,647,010,891
TOTAL NON-CURRENT 17,483,801,029 16,414,862,031 21,086,300,011

LIABILITIES
TOTAL LIABILITIES 27,004,906,260 31,834,261,610 32,327,680,651
EQUITY
Equity attributable to equity

holders of the Parent
Company:
Capital Stock 3,487,727,328 3,487,727,328 3,487,727,328
Paid-in capital 15,260,667 15,260,667 15,260,667
Appropriated Retained 5,000,000 7,500,000,000 7,000,000,000

earnings
Unappropriated Retained 3,214,013,422 3,100,126,477 4,445,357,676

Earnings
Remeasurements gains on 222,022,065 193,064,950 183,084,079

defined benefit plans
Stockholders' Equity – 11,939,023,482 14,296,179,422 15,131,429,750

Parent
Non-controlling interests 79,155,931 82,773,636 87,333,745
TOTAL EQUITY 12,018,179,413 14,378,953,058 15,218,763,495
TOTAL LIABILITIES AND 39,023,085,673 46,213,214,668 47,564,444,146

EQUITY
Table 4.5.1 Statement of Financial Position of DMCI Homes
INCOME 2014 2015 2016
Real estate sales 12,232,699,569 13,461,859,381 10,039,174,952
Revenue from hotel services 100,719,589 133,426,032 193,376,576
Property Management 67,191,574 81,265,374 104,722,831

Revenue
Finance income 270,950,963 310,453,227 254,657,308
Dividend income 9,887,500 4,289,500 -
Equity in net earnings 69,113,137 60,715,517 60,881,478
Other income 947,570,797 485,563,279 1,113,622,662
TOTAL INCOME 13,698,133,129 14,537,570,310 11,766,435,807
COSTS OF SALES AND

SERVICES
Cost of real estate 6,408,116,800 6,673,502,217 5,425,160,117
Cost of hotel services 61,133,263 80,984,690 100,939,845
Cost of services 36,947,068 49,083,110 55,010,227
Finance cost 127,604,628 185,479,128 300,626,628
TOTAL COST OF SALES AND 6,633,801,759 6,989,049,145 5,881,736,517

SERVICES
GROSS PROFIT 7,064,331,370 7,548,521,165 5,884,699,290
OPERATING EXPENSES 2,501,184,007 2,462,295,342 2,765,965,997
INCOME BEFORE INCOME 4,563,147,363 5,086,225,823 3,118,733,293

TAX
PROVISION FOR INCOME 1,273,676,255 1,498,945,063 897,458,425

TAX
NET INCOME 3,289,471,108 3,587,280,760 2,221,274,868
NET INCOME ATTRIBUTABLE

TO
Equity holders of the Parent 3,289,217,634 3,586,113,055 2,216,714,759

Company
Non-controlling interests 253,474 1,167,705 4,560,109
Table 4.5.1 Statement of Comprehensive Income of DMCI Homes
4.5.2 RATIO ANALYSIS
4.5.2.1 LIQUIDITY RATIOS
Liquidity Ratios are the ratios that measure the ability of a company to meet its short-
term debt obligations. These ratios measure the ability of a company to pay off its short-term
liabilities when they fall due. These ratios come off the balance sheet and hence measure the
liquidity of the company on an ordinary day.
4.5.2.1.1CURRENT RATIO
This ratio is obtained by dividing the "Total Current Assets" of DMCI Homes by its "Total
Current Liabilities". A refinement of quick ratio and indicates the extent to which readily available
funds can pay off current liabilities. It expresses the working capital relationship of the current
assets available to meet the company's current obligations.
Formula 2014 2015 2016
Current
Current Assets
3.60 2.66 3.86
Ratio = Current
Liabilities
This means that in 2014, DMCI Homes had a strong financial position in the market and
that it has sufficient liquid assets to maintain its operations. A higher current ratio is always more
favorable than a lower current ratio because it shows the company can more easily make current
debt payments. However, this strong financial condition decreased by 0.94 in 2015 and eventually
increased by 1.2 in 2016.

4.5.2.1.2 QUICK RATIO
This ratio is obtained by dividing the "Total Quick Assets" of DMCI Homes by its "Total
Current Liabilities". The ratio tells creditors how much of the company's short-term debt can be
met by selling all the company's liquid assets at very short notice.
Formula 2014 2015 2016
Quick Assets
Quick Ratio
Current 1.06 0.71 0.85
=
Liabilities
This means that DMCI Homes' quick ratio did not improve considerably in 2015 and 2016
because based on the result, the ratio says that DMCI Homes doesn't have the capacity to pay its
current liabilities if these were due immediately. But in 2014 DMCI Homes was able to meet its
short-term obligation using most of its liquid assets because a quick ratio of 0.90 or 1.00 is the
acceptable quick ratio in most industries because companies could pay off its current liabilities
without selling any long-term assets.
4.5.2.1.3 SOLVENCY RATIO
This ratio identifies a going concern issue and a firm's ability to pay its bills in the short
term and long term. Solvency ratios focus more on the long-term sustainability of a company
instead of the current liability payments.
Formula 2014 2015 2016
Net Income
+
Solvency
Depreciation 0.13 0.12 0.08
Ratio =
Total
Liabilities
This means that in the year 2016, DMCI Homes’ solvency ratio resulted in a favorable ratio
although it only decreased from 2015 going to 2016, showing that DMCI Homes can meet long-
term liabilities from the past few years. For the year 2016 shows the lowest solvency ratio it usually
implies a more stable business with the potential of longevity because a company with a lower
ratio also has lower overall debt.
4.5.2.2 LEVERAGE RATIOS
4.5.2.2.1 DEBT TO EQUITY RATIO
This ratio is obtained by dividing the "Total Liabilities" of DMCI Homes by its "Total
Equity". The ratio measures how the company is leveraging its debt against the capital employed
by its owners.
Formula 2014 2015 2016
Debt to Total
Equity Liabilities 2.25 2.21 2.12
Ratio= Total Equity
This means that DMCI Homes has been aggressive in financing its growth with debt. In
the year 2014, DMCI Homes with a higher debt to equity ratio of 2.25 compared to 2015 and 2016
are considered riskier to creditors and investors than with a lower ratio. In the years 2015 and 2016
also shows a high debt to equity ratio. This implies that for every peso of DMCI Homes owned by
the shareholders, it owes 2.21 to creditors in 2015 and 2.12 in 2016.
4.5.2.3 EFFICIENCY RATIOS
Efficiency ratios are ratios that come off the balance sheet and the Income Statement. The
efficiency ratio is typically used to analyze how well a company uses its assets and liabilities
internally. An efficiency ratio can calculate the turnover of receivables, the repayment of liabilities,
the quantity and usage of equity, and the general use of inventory and machinery.
4.5.2.3.1 INVENTORY TURNOVER RATIO
The ratio is obtained by dividing the "Net Sales" of DMCI Homes by its "Total Inventory".
The ratio is regarded as a test of Efficiency and indicates the rapidity with which DMCI Homes
can move its merchandise.
Formula 2014 2015 2016
Inventory Turnover Net Sales

47.43 31.75
Ratio = Inventory 50.5
DMCI’s inventory turnover ratio decreased by 3.07 in 2015. This means that the company
has a low inventory turnover ratio. It is simply an unfavorable scenario, a low turnover means that
the corporation is not able to sell its products efficiently, we can see in the horizontal analysis that
DMCI Homes are buying too much inventory for demand which increased in 2015 or we can
assume that they are throwing out expired or deteriorated products. These conditions often cause
the corporation to sell products at discounts to clear these out. A lower inventory turnover ratio
can result from inventory buildup intended to meet pending spikes in demand. The company
should predict pending sales growth for the ratio to improve in the next period.
4.5.2.3.2 ACCOUNTS PAYABLE TO SALES RATIO
This ratio is obtained by dividing the "Accounts Payables" of DMCI Homes by its "Net
Sales". This ratio indicates how much of the suppliers’ money the company uses to fund its sales.
The higher the ratio means that the company is using its suppliers as a source of cheap financing.
The working capital of such companies could be funded by their suppliers.
Formula 2014 2015 2016
Accounts
A/P to Sales X100
Payable 10.30% 10.53% 12.41%
Ratio = %
Net Sales
This means that DMCI Homes turned out to have improved from the previous year of
accounts payable against its sales, thus the company has been efficient in converting its sales into
cash and promptly able to pay its suppliers. Short-term creditors, financial managers & lenders to
DMCI Homes might use these accounts payable ratios as indicators of the company’s financial
strength to make punctual payments on its accounts payable & liabilities outstanding. Payment
requirements will usually vary from supplier to supplier, depending on its size and financial
capabilities. DMCI Homes resulted on increasing by 1.88% from 2015 to 2016 means “A high
ratio means there is a relatively short time between the purchase of goods and services and payment
for them. Conversely, a lower accounts payable turnover ratio usually signifies that a company is
slow in paying its suppliers.
But a high accounts payable turnover ratio is not always in the best interest of a company.
Numerous companies extend the period of credit turnover (i.e. lower accounts payable turnover
ratios) getting extra liquidity.
4.5.2.4 PROFITABILITY RATIOS
Profitability Ratios focus on a company's return on investment in inventory and other
assets. These ratios basically show how well companies can achieve profits from their operations.
4.5.2.4.1 RETURN ON SALES
The return on sales of DMCI Homes determines its ability to withstand competition and
adverse conditions like rising costs, falling prices or declining sales in the future. The profit margin
ratio shows what percentage of sales are left over after all expenses are paid by the business.
Formula 2014 2015 2016
Net Profit Net Income X100

26.9% 26.23% 21.49%
Margin = Net Sales %
This means that DMCI Homes has quite a high rate of return on sales the increase in the
rate in 2014 and 2015 is significant and identifies the company as more successful than in 2016.
This tells us that DMCI Homes was able to generate income from the 26.9% of its invested capital
in 2014 and 26.23% in 2015 and it measures how much profits are produced at a certain level of
sales. Thus, DMCI Homes was able to convert what it has invested into net income for the
company.
4.5.2.4.2 RETURN ON ASSETS
The return on assets of DMCI Homes determines its ability to utilize the assets it employed
efficiently and effectively to earn a good return. This ratio measures how efficiently a company
can manage its assets to produce profits during a period.
Formula 2014 2015 2016
Net Income
X100
Profit Margin = Total 8.43% 7.76% 4.67%
%
Assets
This means that DMCI Homes had less ability to convert what it has invested into net
income for the company from the 7.76% of its invested capital in 2015 to 4.67% in 2016. It only
makes sense that a higher ratio is more favorable to investors because it shows that the company
is more effectively managing its assets to produce greater amounts of net income.
4.5.2.4.3 RETURN ON EQUITY
The return on equity of DMCI Homes measures the ability of the management of the
company to generate adequate returns for the capital invested by the company owners. This
measures the ability of a firm to generate profits from its shareholders' investments in the company.
Formula 2014 2015 2016
Net Income X100

Profit Margin = 27.4% 24.9% 14.6%
Total Equity %
DMCI Homes has a high return on equity ratios although there was a decrease in 2015 and
2016 by 2.5% and 10.3%, respectively. This means that the management has been inefficient in
utilizing its equity base in generating better returns for its investors. The investors want to see a
high return on equity ratio because this indicates that the company is using its investors' funds
effectively.
4.6 PRODUCTION/ OPERATIONS
DMCI Homes boast greater control over product quality through its synergy with DM
Consunji Inc., which is a triple-A rated construction company with more than 63 years of
construction experience. Using the latest construction technology, DMCI ensures the durability of
developments. In terms of passing such rights to buyers, DMCI developments are turned over at a
faster rate of 3 years compared to the industry at 5 years. In terms of construction design, individual
units of DMCI have larger cuts than Filinvest Land Inc. and Ayala Land. DMCI's developments
are resort living theme.
4.6.1 PROCESS
The Company's main activities include the development, management, and selling of
various real estate such as condominium units, subdivision lots, buildings, resorts, and others. The
Company's business goal is to provide affordable residential units in urban-friendly, serviced
communities near places of work, study, and leisure. DMCI Homes endeavors to achieve
objectives that advance the proposition of "profit with honor", namely, to ensure business partners,
environmental compliance, and career development of its people.
4.6.2 CAPACITY
DMCI Homes is wholly – owned subsidiary by DMCI Holdings, Inc. a leading
conglomerate in the Philippines with interests in construction, real estate, power, and mining.
DMCI – HI is listed at the PSE with a market capitalization of Php 179.06 billion as of December
31, 2016. One of the Company's affiliates is D.M. Consunji Inc. ("DMC" I), a DMCI – HI wholly
– owned subsidiary and one of the Philippines' leading Triple-A rated general construction
companies.
4.6.3 INVENTORY
4.6.3.1 LAND INVENTORY
In line with its goal of providing well – located residential options, DMCI Homes purchase
properties within the Metro Manila area. The Company's land development begins one to two years
from property acquisition to avoid carrying costs, resulting in more competitive sales pricing.
Potential land acquisitions are assessed based on strategic locations, acquisition price relative to
prevailing market prices, presence of competition in the area, shape of the lot, potential legal and
technical hindrances to development, and local governments requirements for development.
Based on the Company's development standards, the minimum land area required for the
Company's five-story and mid-rise developments is one hectare, with a zonal classification of R –
2. Ten-story and mid-rise developments have a minimum land area requirement of 5,000 square
meters, with a zonal classification of R – 3. High – rise developments require a minimum land area
of 3,000 square meters and zonal classification of R – 3.
Figure 4.6.3.1 The Company’s current land inventory available for development
The Company is currently exploring opportunities for diversification of its property
developments in key urban centers in the Northern Luzon and Western Mindanao regions. Future
land acquisitions will be funded by debt finance and internally generated funds.
In addition to its land inventory, the Company owns its corporate headquarters, located at
1321 Apolinario St. Bangkal, Makati City, Philippines, 1228. The property has a total land area of
approximately one hectare, upon which stands a six-story building with annex, with a total floor
area of approximately 35,000 square meters.
4.6.3.2 ENCUMBRANCES
Certain parcels of land of the Company which are minor in size considering the total
landholdings of the Company are subjected to proceedings arising out of claims of certain
individuals. While the results of litigation cannot be predicted with certainty, the Company
believes that the outcome of these proceedings will not have a material adverse effect on the
property, considering the nature of the claims asserted in the proceedings.
Properties of the Company in which projects which have been created are subjects to
restrictions arising from the nature of the projects created over them. For instance, properties over
which a condominium building has been constructed would have restrictions annotated on the title
of such property arising from the master deed restrictions on the use of the property for
condominium use.
4.6.3.3 LEASED PROPERTIES
The Company has entered leases of spaces in commercial areas in Metro Manila in which
model units for its projects are set – up. The leases may be renewed based on the marketing needs
of the Company. Due to the small space involved, the lease rental payments are not substantial.
Further information on these leases is provided in the figure below.
Figure 5.4.3 Leased properties for the purpose building model units
4.6.4 WORKFORCE
The Company has 1,097 employees as of December 31, 2016. Employees of the Company
can be classified based on their positions. The total number of employees consists of 870 Rank
and File Employees, 138 Junior-Senior Supervisor employees, 70 Assistant Manager to the
Manager employees, 14 Senior Manager to the Vice Presidents, and 5 Senior Vice President to the
President. The employees of the Company are non – unionized and are not covered by collective
bargaining agreements. They receive supplemental benefits such as health care benefit plan, dental
care benefits plan, and group accident insurance coverage.
4.6.5 SUPPLIERS
The Company’s sources and availability of raw materials and the names of principal suppliers are
shown in the figure below.
Figure 5.4.5 List of Names of the Raw Material Suppliers of DMCI Homes
4.6.6 CUSTOMERS
The country's middle-income socio-economic group is emerging as the most promising real
estate market., and this has intensified competition in the property development business for that
market segment. The Company's significant sales growth in recent years has made it one of the
dominant players in the middle – income residential market category, and its pioneering
construction and development methods, specifically in mid-rise developments have been used as
a model by some competitors due to the success of these concepts.
To leverage against real estate groups positioned in the same market category, DMCI
Homes maximizes its investments by drawing on the Company's strengths and resources as both
developer and builder, enabling it to offer attractive, even lower prices than the direct competition,
and produce value for home buyers without adversely affecting its profitability. Aside from
offering competitively – priced, high-quality units, DMCI Homes ensures good property location
and on-time project completion.
4.7 RESEARCH AND DEVELOPMENT

With persistent research, DMCI is a pioneer in the application of advanced construction
technologies in the Philippines. It is renowned for completing technologically complex projects
on or ahead of schedule. Furthermore, it enjoys the patronage of both new and repeats institutional
clients.
4.7 SUMMARY AND CONCLUSION
4.7.1 INTERNAL FACTOR EVALUATION MATRIX
Internal Factor Evaluation Matrix

Key Internal Factors Weight Rating Weighted Score
Strengths
1. Great Control of Quality 0.15 4 0.60
2. Faster Lead time in project developments 0.10 4 0.40

3. Unique capability in architectural design concepts 0.10 4 0.40
and facilities
4. Sound Financial Condition 0.05 3 0.15
5. Cost advantages over key rivals 0.10 3 0.30

Weaknesses
1. Lag rivals in advertising and promotions 0.05 3 0.15
2. Small Capitalization in its projects 0.15 3 0.45

3. Developments are not located in central business 0.05 3 0.15
areas
4. Developments are limited to residential types 0.15 4 0.60
5. Small geographic coverage 0.10 2 0.20
TOTAL 100% 3.40
STRENGTHS
1. GREAT CONTROL OF QUALITY
Raw materials and construction services are being sourced within DMCI Homes' parent
company which is the DMCI Holdings group. Thus, the company has an advantage of having been
affiliated with a triple A construction company.
2. FASTER LEAD TIME IN PROJECT DEVELOPMENTS
DMCI Homes can build up its inventory at a faster pace and can be more responsive to a
changing market environment because it can deliver a project in three years compared to the
industry average of five years.
3. UNIQUE CAPABILITY IN ARCHITECTURAL DESIGN CONCEPTS AND
FACILITIES
DMCI Homes has pioneered genuine resort- inspired daily living with its pioneering
midrise developments. The company is renowned among condo dwellers in the local property
market for offering unique and refreshing living concepts.
4. SOUND FINANCIAL CONDITION
DMCI Homes has a strong financial condition because of its proven strong sales record. It
has been able to utilize its capital investments and convert these into income. It is very liquid and
can pay off its short-term liabilities on time.
5. COST ADVANTAGES OVER KEY RIVALS
Since DMCI Homes work with DM Consunji, as stated in the first listed strength, it has
also allowed the company to control the cost of all its developments. This has given the company
the ability to price its developments lower compared to its competitors namely- Ayala Land and
Filinvest Land.
WEAKNESSES
1. LAG RIVALS IN ADVERTISING AND PROMOTIONS
DMCI Homes has a weak distribution channel. They are behind their competitors in
advertising their projects. The Commercials of DMCI Homes on televisions, print ads are
exceptionally rare. Based on observations, the company is not utilizing the opportunity in
promoting their products in social medias like uploading videos on Facebook or YouTube. Being
inactive in advertising allows the company’s competitor to have an edge over the company.
Furthermore, because of the lack in distribution channels, DMCI Homes is not the leader in the
market that they target.
2. SMALL CAPITALIZATION IN ITS PROJECTS
Compared to its competitors, DMCI Homes has a relative small capitalization allotted for
real estate development. And because of this small capitalization, it is not considered to be the
primary source of income of DMCI Holdings.
3. DEVELOPMENTS ARE NOT LOCATED IN CENTRAL BUSINESS AREAS
Unlike its key competitors, DMCI Homes’ projects are not centrally located. This is a
strategic choice of the company. However, the downside of this is that the accessibility of the
location is a key decision factor of a buyer. Ayala Land for instance locates its developments within
business areas.
4. DEVELOPMENTS ARE LIMITED TO RESIDENTIAL TYPES
Unlike its key competitors, DMCI is limited in developing only the residential market. It
has no experience in developing commercial and office real estate. Ayala Land has been
developing commercial real estate through Ayala Malls. Robinson ‘s and MegaWorld also has
offices and commercial developments. Their projects combine office and commercial spaces or
what MegaWorld termed as township developments such as Eastwood City. Regarding this, DMCI
is left behind in terms of building office or commercial spaces.
5. SMALL GEOGRAPHIC COVERAGE
DMCI Homes has a smaller distribution channel compared to its key competitors.
Its key competitors have more sales offices and partnerships with external brokers both within and
outside the country.
CHAPTER 5
STRATEGY FORMULATION
5.1 SWOT MATRIX

Strengths Weaknesses
S1. Great Control of Quality W1. Lag rivals in advertising and
S2. Faster Lead time in project promotions
developments W2. Small Capitalization in its
S3. Unique capability in projects
architectural design concepts and W3. Developments are not located in
facilities central business areas in Metro Manila
S4. Sound Financial Condition W4. Developments are limited to
S5. Cost advantages over key residential types
rivals W5. Small geographic coverage
Opportunities SO Strategies WO Strategies
O1.Rising number of BPOs in 1. Continue offering cheap 1. Offer promotions for
Metro Manila condominium units to attract locals products that are already
O2.Young investors capacity to and foreigners. ( S5, O1, O4) MP developed outside the
spend 2. Penetrate the market of young coverage of Metro Manila.
O3.Increase in labor force investors through dynamic, fast- (W5, O2, O6) MP, MD
participation paced, and quality condominium 2. Present the company’s
O4.Tourism-driven demand units located within the center of products as the best and the
O5.Increase in GDP by 6.9% Metro Manila at an affordable most affordable among all
O6.Brand Visibility through price. (S3, S5, O2) MP other substitute products
social media 3. Construct inexpensive yet quality for people who are finding
high-rise residential buildings, a home in Metro Manila
condominium units specifically (W4, O1, O2) MP, MD
catered to foreigners according to
their taste and lifestyle (S3, S5,
O4) MP, PD
Threats ST Strategies WT Strategies
T1. Climate Change 1. Develop residential properties 1. Develop more projects
T2. Congestion and Traffic in intended for low and middle- outside Metro Manila (W4,
Mega Manila income earners in Metro Manila. W5, T1, T3) PD, MP, MD
T3. Risk of flooding in Metro (S1, S3, S5,) PD 2. Upload videos on social
Manila 2. Take advantage of the company’s media sites (i.e. Facebook,
T4. Tax Reform effected in 2018 Triple A builder reputation and Twitter, YouTube) showing all
T5. RERBA slows down by adapt new technological amenities of their products.
7.7% advancements to withstand (W1, T5) MP, MD
flooding and other calamities. (S1,
S3, S5, T1, T3) PD
A TALLY OF STRATEGIES IN SWOT
STRATEGY OPTIONS Frequency

Forward Integration
Backward Integration
Horizontal Integration
Market Penetration 7
Market Development 4
Product Development 4
Related Diversification
Unrelated Diversification
Retrenchment
Divestiture
Liquidation
ANALYSIS OF SWOT MATRIX
The SWOT Matrix assesses both internal and external aspects of the business. The SO
strategies are laid out to use the company’s strengths in maximizing its opportunities. To improve
the company’s weaknesses, the WO strategies are presented. While the ST strategies use strengths
to minimize the given threats, the WT strategies demand the company to do something to improve
weaknesses and minimize threats.
Based on the presented strategies, it basically falls on two strategies- market penetration
and product development, and market development
5.2 STRATEGIC POSITION AND ACTION EVALUATION (SPACE) MATRIX
X = -.57
Y = 2.5
STRATEGIES FOR THE CONSERVATIVE MATRIX
DMCI Homes belongs to the conservative quadrant. This means that the conservative
posture arises when DMCI Homes is financially strong but is unlikely to make significant returns
to the business. The strategy is to look for related diversification, market penetration, market
development, and product development opportunities in more attractive competitive situations.
SPACE MATRIX
Financial Position Rate Stability Position Rate

Cash Flow 6 Technological Changes -4
Inventory Turnover 5 Demand Variability -1
Earnings per Share 3 Price Range of Competing -2
Products
Price Earnings Ratio 3 Competitive Pressure -1
Working Capital 6 Risk Involved in Business -3
Return on Investment 6 Barriers to entry into market -3

Total 29 Total -14
Average 4.8333 Average -2.3333
Rate Industry Position Rate

Competitive Position
Market Share -5 Growth Potential 4

Product Quality -3 Financial Stability 4
Customer Loyalty -6 Productivity, capacity utilization 5
Capacity Utilization -3 Resource Utilization 3
Control over Suppliers and -4 Profit Potential 4
Distributors
Technological Know – How -5 Ease of entry into market 1
Product Life Cycle -3 Growth Potential 4
Total -29 Total 25

Average -4.1429 Average 3.5714
CONCLUSION
SP Average is -2.33 CP Average is -4.14
IP Average is 3.57 FP Average is 4.83
Directional Vector Coordinates: x-axis: -0.57
Directional Vector Coordinates: y-axis: 2.5
SPACE MATRIX ANALYSIS
DMCI Homes should be more conservative in approach in undertaking strategies for them
to maintain or surpass their current position in the market. Since the directional vector of DMCI
Homes is in the conservative quadrant (upper left quadrant) of the SPACE Matrix, this means that
DMCI Homes should employ the strategies that would be found in the Quadrant 2 of the Grand
Strategy Matrix.
5.3 BOSTON CONSULTING GROUP (BCG MATRIX)
Relative Market Share
High Medium Low
1.0 0.50 0.0
High Question Mark
+15 STAR
Industry
Sales
Growth Rate
Medium
0 Cash Cows Dogs
Low
-15
ANALYSIS OF BCG MATRIX
After computing the necessary pieces of information to construct the matrix and evaluating
these data, DMCI Homes has fallen into the first Quadrant (Question Mark) which indicates that
parts of a business have high growth prospects but has a low market share given that the market
share is 13% and the growth rate is 10%. The result is a rage net cash consumption. The company
is consuming a lot of cash but is bringing little in return. However, since these business units are
rapidly growing, they do have the potential to turn themselves into Stars. Companies are
recommended to invest in question marks if the product has the potential for growth, or to sell if
it is in the contrary. DMCI Homes must be analyzed carefully to determine whether they are worth
the investment required to grow their market share.
5.4 INTERNAL- EXTERNAL (IE) MATRIX
TOTAL IFE RATING
IFE = 3.40 STRONG AVERAGE WEAK

EFE = 3.31 3.0 to 4.0 2.0 to 2.99 1.0 to 1.99
HIGH I II III
3.00 to 4.00
MEDIUM IV V VI
2.00 to 2.99
LOW VII VIII IX
1.00 to 1.99
ANALYSIS OF IE MATRIX
Based on the IE Matrix, DMCI Homes falls into the first cell: Grow and Build are the
strategies which are recommended for companies which fall in that particular cell. This requires
intensive and aggressive tactical strategies. The strategies should focus on market penetration,
market development, and product development. From an operational perspective, a backward,
forward and horizontal integration should also be considered.
5.5 GRAND STRATEGY MATRIX
ANALYSIS OF GRAND STRATEGY MATRIX
a. COMPETITIVE POSITION
DMCI Homes has weak competitive position brought about by its lack of adequate
capitalization for expansionary activities, its limited distribution network and its global presence.
Although their market share is progressively increasing, it still lags behind key competitors in
terms of capitalization and diversified product lines within the same industry such as the
construction of retail spaces within constructed high – rise residential buildings.
Furthermore, DMCI Homes lacks presence in key business districts. They often construct
projects outside recognized business districts in Metro Manila like Bonifacio Global City and
Makati Central Business Districts. Because of this, they cannot easily penetrate the market of
young professionals who would opt to reside within these areas.
b. MARKET GROWTH
The immense traffic in Metro Manila, causes working individuals to acquire condominium
units for their convenience which adds to market growth. There also those OFW’s who would
acquire real properties as their investment and for their personal use which also helps in increasing
the market growth.
Since owning a condominium unit is cheaper compared to buying or building a house,
individuals prefer condominiums instead which adds to the improvement of the market growth.
Another is that people prefer modern living which could also be the reason of choosing
condominiums. Furthermore, they prefer instant or readily available units with lots of amenities.
5.6 SUMMARY OF MATRICES AND ANALYSES
STRATEGY OPTIONS SWOT SPACE IE GRAND BCG TOTAL

INTEGRATION STRATEGIES
Forward Integration ✓ 1
Backward Integration ✓ 1
Horizontal Integration ✓ ✓ 2
Market Penetration ✓ ✓ ✓ ✓ ✓ 5
Market Development ✓ ✓ ✓ ✓ ✓ 5
Product Development ✓ ✓ ✓ ✓ ✓ 5
DIVERSIFICATION STRATEGIES
Related Diversification ✓ 1
Unrelated Diversification 0
Retrenchment 0
Divestiture ✓ ✓ 2
Liquidation ✓ 1
ANALYSIS OF THE SUMMARY OF MATRICES AND ANALYSES
Of amongst the strategy decisions, market penetration, product development, and market
development are constantly suggested by the SPACE, IE, and GRAND matrices. The mentioned
strategies may be used by the company since it has garnered the highest total score equivalent to
three. Moreover, the unrelated diversification and retrenchment strategies are assessed to be not
suitable to the company since it never appeared in the results of any of the matrices presented.
5.7 QUANTITATIVE STRATEGIC PLANNING MATRIX
STRATEGIC
ALTERNATIVES
(Market (Product (Market
Penetration) Development) Development)
Present Develop more Upload videos on
products as projects social media sites
the best and outside Metro (i.e. Facebook,
the most Manila Twitter, YouTube)
affordable for showing all
people who amenities of their
are finding a products
home in
Metro Manila
Key Factors Weight AS TAS AS TAS AS TAS
Opportunities
Rising number of BPOs in Metro .11 4 .44 3 0.33 4 0.44
Manila
Young investors capacity to spend .10 3 0.30 3 0.30 3 0.30
Increase in labor force participation .08 3 0.24 2 0.16 2 0.16
Tourism-driven demand .11 3 0.33 4 0.44 4 0.44
Increase in GDP by 6.9% .05 2 0.10 2 0.10 2 0.10
Brand Visibility through social media .10 4 0.40 4 0.40 4 0.40
Threats
Climate Change .09 3 0.27 4 0.36 3 0.27
Congestion and Traffic in Mega .08 4 0.32 3 0.24 3 0.24
Manila
Risk of flooding in Metro Manila .09 3 0.27 3 0.27 3 0.27
Tax Reform effected in 2018 .09 2 0.18 4 0.36 2 0.18
RERBA slows down by 7.7% .10 3 0.30 2 0.20 2 0.20
Total 1.00 3.11 3.16 3.00

Strengths
Great Control of Quality 0.15 3 0.45 4 0.60 3 0.45
Faster Lead time in project 0.10 4 0.40 3 0.30 3 0.30
developments
Unique capability in architectural 0.10 4 0.40 4 0.40 3 0.30
design concepts and facilities
Sound Financial Condition 0.05 2 0.10 2 0.10 2 0.10

Cost advantages over key rivals 0.10 4 0.40 3 0.30 2 0.20
Weaknesses
Lag rivals in advertising and 0.05 3 0.15 2 0.10 3 0.15
promotions
Small Capitalization in its projects 0.15 4 0.60 3 0.45 2 0.30
Developments are not located in 0.05 4 0.20 4 0.20 3 0.15
central business areas
Developments are limited to 0.15 3 0.45 3 0.45 3 0.45
residential types
Small geographic coverage .10 4 0.40 3 0.30 3 0.30
Total 1.00 3.55 3.20 2.70
Grand Total 6.66 6.36 5.70
ANALYSIS OF THE QUANTITATIVE STRATEGIC PLANNING MATRIX
Based on the table above, it can be concluded that the most suggested for DMCI Homes
from the results of the matrices used would be Market Penetration, because it garnered the highest
total attractiveness score among the three strategies evaluated.
CHAPTER 6
OBJECTIVES, STRATEGY RECOMMENDATIONS, AND ACTION PLANS
6.1 REVISED VISION AND MISSION STATEMENT
6.1.1 REVISED VISION STATEMENT
To be the leading real estate holding company and elevating the lifestyle of the common
Filipino into a more comfortable and convenient lifestyle.
Parameter Y/N Why?
Does it clearly answer the Y To be the leading real estate holding

question: What do we want to company.
become?
Is it concise enough yet Y To elevate the lifestyle of the common

inspirational? Filipino into a more comfortable and
convenient lifestyle.
Does it give a clear indication Y Businesses are in a going concern principle;

as to when it should be its vision and should be continuous in action.
attained?
6.1.2 REVISED MISSION STATEMENT
As the country’s first Triple A developer, DMCI Homes creates premium quality, urban –
friendly, fully served communities for the moderate income earning families that seeks to live
comfortably near their place of work, of study and of leisure.
In doing so, we are committed…
a. To find new and innovative ways to satisfy our customers

b. To achieve a sustainable growth on our shareholders’ investment,
c. To maintain a mutually beneficial relationship with our partners in the business,
d. To care for the environment we work in,
e. To have an energized, capable, and customer focused workforce
while building an organization that espouses Integrity, Excellence, and Teamwork.
6.2 STRATEGIC AND FINANCIAL OBJECTIVES
6.2.1 STRATEGIC OBJECTIVES
After analyzing the current standing of the company by using different matrices, the
researcher was able to determine strategic objectives that will be strategic to the growth and
development of DMCI Homes:
• To increase the Sales of DMCI Homes, by offering its products as the best and most
affordable among all other substitute products.
• To increase the Market Share of DMCI Homes by uploading videos on social media sites
(i.e. Facebook, Twitter, YouTube) showing all amenities of their products.
• To widen the geographical coverage of DMCI Homes by developing projects outside of Metro
Manila.
6.2.2 FINANCIAL OBJECTIVES
*In thousand pesos

Year Sales Revenue Net Income
2016 11,766,435,807 2,221,274,868
2017 12,671,274,721 2,392,090,905
2018 13,645,695,747 2,576,042,696
2019 14,695,049,749 2,774,140,379
2020 15,825,099,075 2,987,471,774
2021 17,042,049,194 3,217,208,354
*Sales Revenue is based on 7.69% increase while net income is based on the projected increase
in sales
6.3 RECOMMENDED BUSINESS STRATEGIES
6.3.1 MARKET PENETRATION
Based on the results of the QSPM, it is clearly evident that the market penetration got the
highest attractiveness score. Market Penetration can be defined as the action of increasing an
existing products market share or introducing new products to acquire market share. Thus, DMCI
Homes should focus on this strategy on the part of strategy implementation. The company should
exert its efforts in getting the attention of potential buyers through providing advertisements that
would appeal to buyers most especially to the common Filipino, while having an estimated budget
of Php 5 million for the succeeding year of operations. To penetrate such wide market, the
company should establish its presence within foreign countries where huge numbers of foreigners
would like to invest in real estate in the Philippines. Moreover, the company should also be active
in participating in international shows to encourage people of different origins; since most of all
the potential buyers are accessing the World Wide Web, the company may also penetrate different
social media sites (i.e. Facebook, Twitter, YouTube and etc.). Through the said approaches, DMCI
Homes will increase primarily in customer brand awareness and secondarily will increase in sales
and would eventually attain the financial objectives of the company.
6.3.2 PRODUCT DEVELOPMENT
Another strategy that DMCI Homes would adapt is product development. Such strategy
refers to the process of either improving the previous available product or creating a new product
and or service that would satisfy a firm’s customers. Regarding the current situation of DMCI
Homes, it may choose to construct a community of high – rise residential buildings that incurs a
gradual speed of deprecation and displays architectural designs in provinces while having a budget
of Php 10 billion in the succeeding year of operations. The company should make use of the
company’s reputation as a Triple A developer that offers its products at a relatively cheaper price
rather than those of key competitors and offer units with innovative architectural design concepts
to attract more potential buyers especially those local and foreign investors who have the capacity
to spend more.
6.4 RECOMMENDED ORGANIZATIONAL STRATEGIES
This section presents the weaknesses addressed by the proposed strategy along with the
researcher’s recommended organizational strategies:
6.4.1 SMALL GEOGRAPHIC COVERAGE
The company should present their products to different nations around the world which
would enable the company to garner a large market share in the global real estate industry. DMCI
Homes would have an edge over its key competitors since only a handful of companies are only
given the chance to showcase their products.
6.4.2 SMALL CAPITALIZATION IN DEVELOPMENTS
DMCI Homes should request for additional capitalization to finance all project
development all while improving its increase in its market share.
6.4.3 LAG BEHIND RIVALS IN ADVERTISING AND PROMOTIONS
Advertisements of DMCI Homes should utilize every available option of advertising its
products through TV promotions, social media advertisements, and major promotional
advertisements. These advertisements should focus on the brand of DMCI Homes as an
exceptional property developer that offers the best quality and offers the best value for money.
6.5 FINANCIAL PROJECTIONS
DMCI Homes
Financial Projections
December 31, 2017, to 2020
(in CURRENT (EST.) (EST.) (EST.) (EST.) (EST.)
thousand 2016 2017 2018 2019 2020 2021
pesos)
Net Sales 11,766,435,807 12671274721 13645695747 14695049749 15825099075 17042049194
Cost of 5,881,736,517 6334042055 6821129889 7345674778 7910557168 8518879014

Sales
Gross 5,884,699,290 6337232665 6824565857 7349374972 7914541907 8523170180
Profit
Operating 2,765,965,997 2978668782 3207728412 3454402726 3720046296 4006117856
Expenses
Income 3,118,733,293 3358563883 3616837446 3894972245 4194495611 4517052324
Before
Tax
Income 897,458,425 966472977.9 1040794750 1120831866 1207023837 1299843970
Tax
Expense
Net 2,221,274,868 2392090905 2576042696 2774140379 2987471774 3217208354
Income
2016 2017 2018 2019 2020
Current Assets
Cash and cash
equivalents 3868999775 4166525858 4486931696 4831976744 5203555755
Financial assets
at fair value
through profit or
loss
Receivables - net 5686986231 6124315472 6595275332 7102452005 7648630564
Real Estate
Inventories 31622758783 34054548933 36673343746 39493523880 42530575867
Other current
assets 2187162918 2355355746 2536482603 2731538115 2941593397
TOTAL
CURRENT
ASSETS 43365907707 46700746010 50292033378 54159490745 58324355583
Noncurrent
Assets:
Noncurrent
receivables 2300542230 2477453927 2667970135 2873137038 3094081276
Net Pension
Asset
Investments in
associates, joint
ventures and
others 341194947 367432838.4 395688423.7 426116863.5 458885250.3
Investment
properties 155125788 167054961.1 179901487.6 193735912 208634203.6
Property, plant
and equipment 1053940342 1134988354 1222268959 1316261442 1417481947
Software Cost 77491126 83450193.59 89867513.48 96778325.26 104220578.5
Deferred tax
assets – net
Other
noncurrent
assets 252242006 271639416.3 292528487.4 315023928.1 339249268.1
TOTAL NON-
CURRENT
ASSETS 4180536439 4502019691 4848225005 5221053508 5622552523
TOTAL
ASSETS 47546444146 51202765701 55140258383 59380544253 63946908106
LIABILITIES
AND EQUITY
Current
Liabilities:
Accounts and
other payables 1245917952 1341729043 1444908006 1556021432 1675679480
Customers’
advances and
deposits 9178277946 9884087520 10644173850 11462710819 12344193281
Payable to
related parties 232799388 250701660.9 269980618.7 290742128.2 313100197.9
Dividends
Payable 100000000 107690000 115971361 124889558.7 134493565.7
Current portion
of long-term
debt 861234841 927463800.3 998785766.5 1075592392 1158305447
Current Portion
of Liabilities for
purchase land 623150513 671070787.4 722676131 778249925.5 838097344.7
TOTAL
CURRENT
LIABILITIES 11241380640 12105842811 13036782123 14039310669 15118933659
Noncurrent
Liabilities:
Long-term debt -
net of current
portion 17479587785 18823768086 20271315851 21830180040 23508920886
Liabilities for
purchased land -
net of current
portion 906622242 976341492.4 1051422153 1132276517 1219348581
Pension
liabilities - net 53079093 57160875.25 61556546.56 66290244.99 71387964.83
Deferred tax
liability 2647010891 2850566029 3069774556 3305840219 3560059332
TOTAL NON-
CURRENT
LIABILITIES 21086300011 22707836482 24454069107 26334587022 28359716764
TOTAL
LIABILITIES 32327680651 34813679293 37490851231 40373897690 43478650423
EQUITY
Equity
attributable to
equity holders of
the Parent
Company:
Capital Stock 3487727328 3755933560 4044764850 4355807267 4690768846
Paid-in capital 15260667 16434212.29 17698003.22 19058979.67 20524615.2
Appropriated
Retained
earnings 7000000000 7538300000 8117995270 8742269106 9414549601
Unappropriated
Retained
Earnings 4445357676 4787205681 5155341798 5551787582 5978720048
Remeasurements
gains on defined
benefit plans 183084079 197163244.7 212325098.2 228652898.2 246236306.1
Stockholders'
Equity – Parent 15131429750 16295036698 17548125020 18897575834 20350799415
Non-controlling
interests 87333745 94049709.99 101282132.7 109070728.7 117458267.7
TOTAL
EQUITY 15218763495 16389086408 17649407153 19006646563 20468257683
TOTAL
LIABILITIES
AND EQUITY 47564444146 51222149901 55161133228 59403024373 63971116948
6.6 DEPARTMENTAL PROGRAMS
OPERATIONS MANAGEMENT PROGRAM: offer more property developments outside

Metro Manila
Activities Team Responsible Timeline

Plan and execute integrated Marketing Department 1-3 MONTHS
marketing communications
plan
Hire additional personnel Human Resource Department = <1 MONTH
such as architects, engineers
and marketing graduates
Increase seminars regarding Marketing Department 1-2 MONTHS
advertising strategies and
sales promotions
Conduct research Research and Development 2-3 MONTHS
Team
Product Development: offer more property developments outside Metro Manila
Activities Team Responsible Timeline

Determine designs based from Research and Construction 2-3 MONTHS
the projections on developments
Department
to be constructed.
Production of high-rise Production Department; 3-4 MONTHS
residential buildings that
displays unique architectural Research and Development
design concepts, facilities and
Department;
other add-ups for leisure
Sales and Marketing Department
Identify the customer Research Department; 1-2 MONTHS

preferences of units in terms of
their lifestyle Finance and Sales Department
Increasing security by Production Department; 2-3 MONTHS
implementing the use of
electronic key access IT Department
Creation of DMCI own mobile 1-2 MONTHS
app Marketing Department;
Production Department and
IT Department
CHAPTER 7
STRATEGY EVALUATION, MONITORING AND CONTROL
7.1 BALANCE SCORECARD
FINANCIAL PERSPECTIVE
Objective Performance Target Initiatives
Measure
• Marketing,
Sales and
Operation
Teams
7.69% growth in net Boost sales efforts to Positive amounts in
income annually increase profitability the income statements • General
Management
• Finance
Department
CUSTOMER PERSPECTIVE
Measure
• Customer Care
Unit
To delight customers and At least 5% increase • Sales, Marketing

improve customer Sales Growth in accuracy and and Construction
relationship customer service Department
• General
Management
INTERNAL BUSINESSES PERSPECTIVE
Measure
• Purchasing
Department
Develop a system and
To stabilize training program that
Less time lag in • Customer Care
convenience in would increase the
constructing a unit Unit
operations knowledge of the
employees
• General
Management
LEARNING & GROWTH PERSPECTIVE

Measure
• Human Resource
Empower all the and General
To explore new
Annual Net Income employees and give Management
avenues for growth of
growth recognition to
the employees
excellent ones • Finance
Department
IX. APPENDICES
BIBLIOGRAPHY
• Philippine Daily Inquirer. (2016, November 16). Genuine resort-living

everyday only at DMCI Homes’ developments. Retrieved from:
http://www.pressreader.com/philippines/philippine-daily-
inquirer/20111116/282260957262318
• DMCI Homes Leasing. (2014, April 7). The Growing Condo Rental Market in
the Philippines. Retrieved from: http://leasing.dmcihomes.com/condo-rental-
market-philippines/
• Gonzales, Iris C. (2015, November 18). DMCI Homes spins off property
management unit. Retrieved from:
http://www.philstar.com:8080/business/2015/11/18/1522984/dmci-homes-
spins-property-management-unit
• DMCI Homes Leasing. (2015, November 22). How to Use Social Media for
Fast Condo Rentals. Retrieved from: http://leasing.dmcihomes.com/social-
media-fast-condo-rentals/
• Brand Values. Retrieved from: https://www.dmcihomes.com/about-us/brand-
values
• DMCI Homes’ Website. Retrieved from: https://www.dmcihomes.com/sellers
• DMCI Homes’ Project Price List. Retrieved from: http://www.dmci-
homes.ph/Prices.aspx
• (2017, February 2). Retrieved from: http://www.dmcinet.com/Abt_Policy.asp.
• Business Mirror. (2016, May 11). Change is coming, but can the new president
handle it? Retrieved from: http://www.businessmirror.com.ph/change-is-
coming-but-can-the-new-president-handle-it/
• DMCI Homes Leasing. Condo Owner’s Guide to Safety Living. (2014,
November 24). Retrieved from: http://leasing.dmcihomes.com/condo-owners-
guide-safety-living/
• Wordpress. International Marketing Group- Truly Rich Maker. (2013, October
3). Retrieved from: http://www.pinoyinvestmentguide.com/imgtrm/
• Interest Rates. Retrived from: http://www.wealthmanagement.com/real-
estate/how-rising-interest-rates-will-impact-real-estate-investors
• Project Locations. Retrieved from: https://www.dmci-online.com/buyers-
guide/frequently-asked-questions/
• (2016, December 22). DMCI Homes joins int’l property show. Retrieved from:
http://www.malaya.com.ph/business-news/special-features/dmci-homes-joins-
int%E2%80%99l-property-show
• Magpoc, L. T. (2017, January 7). More Filipinos use social media to hunt for
properties: report. Retrieved from
http://www.bworldonline.com/content.php?section=Corporate&title=more-
filipinos-use-social-media-to-hunt-for-properties-report&id=139256
• Galolo, J.O. (2017, February 14). A push to develop socialized housing.
Retrieved from: http://www.sunstar.com.ph/cebu/business/2017/02/14/push-
develop-socialized-housing-525799
• R.A. 7279. Retrieved from: http://hlurb.gov.ph/wp-content/uploads/laws-
issuances/mandates/ra_7279.pdf
• PH real estate faces bright future in 2017. (2017, January 20). Retrieved from
http://thestandard.com.ph/real-estate/227215/ph-real-estate-faces-bright-
future-in-2017.html
• Abadilla, D. D. (2017, February 15). Separations, not marriage drop, affect
housing sector. Retrieved from:
http://newsinfo.inquirer.net/871569/separations-not-marriage-drop-affect-
housing-sector
• Magpoc, L. T. (2017, January 7). Real estate prospects for 2017. Retrieved
from: http://business.inquirer.net/222573/real-estate-prospects-2017
• Schnabel, C. (2016, February 3). Prices of mid-range condos seen to slow down
due to oversupply. Retrieved from:
http://www.rappler.com/business/industries/real-estate/121236-lamudi-2015-
research-report
• Your Easy Guide To Philippine Real Estate Laws. (2015, January 13).
Retrieved from: http://leasing.dmcihomes.com/guide-philippine-real-estate-
laws/
• Shaffer, L. (2017, January 31). Trump-inspired outsourcing chill may hit office
property in the Philippines. Retrieved from:
http://www.cnbc.com/2017/01/31/philippines-office-real-estate-poised-for-
slowdown-as-trump-effect-hits.html
• 6 Ecological Issues That Affect Real Estate of Metro Manila. (2013, November
13). Retrieved from: http://www.zipmatch.com/blog/ecological-issues-affect-
real-estate-of-metro-manila/
• 2016 economic growth fastest in three years. (2017, January 26). Retrieved
from: http://cnnphilippines.com/news/2017/01/26/philippines-GDP-2016.html
• Schnabel, C. (2016, August 18). Philippines GDP grows 7% in Q2 2016.
Retrieved from: http://www.rappler.com/business/economy-watch/143412-
gross-domestic-product-philippines-q2-2016
• Avida Vs SMDC Vs DMCI. [Web post]. (2013, September 25). Retrieved from:
http://blog.propertymarketph.com/avida-vs-dmci-vs-smdc/
• Saulon, Victor V. (2016, April 04). Consunji’s DMCI doubles capex to P40B
in 2016. Retrieved from
http://www.bworldonline.com/content.php?section=Corporate&title=consunji
s-dmci-doubles-capex-to-p40b-in-2016&id=125401
• Montealegre, Krista Angela M. (2016, April 13). Ayala Land to keep capex
budget near record levels through 2020. Retrieved from
http://www.bworldonline.com/content.php?section=
• Corporate&title=ayala-land-to-keep-capex-budget-near-record-levels-through-
2020&id=125877
• Montealegre, Krista A. M. (2016, March 08). Megaworld allots P55-B capex
this year. Retrieved from
http://www.bworldonline.com/content.php?section=Corporate&title=megawo
rld-allots-p55-b-capex-this-year&id=124151
• Retrieved from
http://sminvestments.com/sites/default/files/reports/SMIC%20SEC%2017-
A%20December%2031%2C%202015.pdf
• Retrieved from http://quotes.wsj.com/PH/MEG/financials
• Retrieved from http://quotes.wsj.com/PH/DMC
• Nicolas, Fiona (2016, September 16). There's a new war coming: Terrorism –
Duterte. Retrieved from http://cnnphilippines.com/news/2016/09/16/war-on-
terrorism-rodrigo-duterte.html
• ABS-CBN news (Dec 02 2016). Metro Manila areas below sea level, MMDA
chief says. Retrieved from http://news.abs-cbn.com/video/anc/08/16/12/metro-
manila-areas-below-sea-level-mmda-chief-says
• About DMCI Homes. Retrieved from: http://acaciaestate.com/about-our-
company/
• DMCI Homes (2017). Retrieved from:
http://quotes.wsj.com/PH/DMC/company-people
• Saulon, Victor V. (2016, April 04). Consunji’s DMCI doubles capex to P40B
in 2016. Retrieved from
http://www.bworldonline.com/content.php?section=Corporate&title=consunji
s-dmci-doubles-capex-to-p40b-in-2016&id=125401
• Montealegre, Krista Angela M. (2016, April 13). Ayala Land to keep capex
budget near record levels through 2020. Retrieved from
http://www.bworldonline.com/content.php?section=
• Corporate&title=ayala-land-to-keep-capex-budget-near-record-levels-through-
2020&id=125877
• Montealegre, Krista A. M. (2016, March 08). Megaworld allots P55-B capex
this year. Retrieved from
http://www.bworldonline.com/content.php?section=Corporate&title=megawo
rld-allots-p55-b-capex-this-year&id=124151
• Retrieved from http://quotes.wsj.com/PH/MEG/financials
• Retrieved from http://quotes.wsj.com/PH/DMC
• Nicolas, Fiona (2016, September 16). There's a new war coming: Terrorism –
Duterte. Retrieved from http://cnnphilippines.com/news/2016/09/16/war-on-
terrorism-rodrigo-duterte.html
• ABS-CBN news (Dec 02, 2016). Metro Manila areas below sea level, MMDA
chief says. Retrieved from http://news.abs-cbn.com/video/anc/08/16/12/metro-
manila-areas-below-sea-level-mmda-chief-says
• Jurevicius,O. (2013, May 1). BCG growth-share matrix. Retrieved from
https://www.strategicmanagementinsight.com/tools/bcg-matrix-growth-
share.html
• BCG growth matrix. Retrieved
fromhttp://www.netmba.com/strategy/matrix/bcg/
• Martin, M. (2016, December 28). What is BCG Matrix? Retrieved from
http://www.businessnewsdaily.com/5693-bcg-matrix.html
• Retrieved from
http://www.zenwealth.com/businessfinanceonline/RA/RatioAnalysis.html
• Financial Ratios. Retrieved from
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• Ratio Analysis. Retrieved from
https://www.readyratios.com/reference/analysis/ratio_analysis.html

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EXECUTIVE SUMMARY

methods in order to maintain the suggested strategy.

on Forward, Backward, Horizontal Integration, Market Penetration Market Development and

DMCI Homes – Strategic Management Paper Page 1

INTRODUCTION AND BACKGROUND OF THE STUDY

1.1 COMPANY PROFILE

1.1.1 BRIEF HISTORY AND DESCRIPTION OF THE CORPORATION

he decided to eventually start his own contracting company.

He incorporated David M. Consunji Incorporated (DMCI) which was founded on

improvements and amenities such as the installation of elevators.

modern residential spaces in the heart of the city on a budget.

Figure 1: Map of Businesses Owned by DMCI Holdings

DMCI Homes – Strategic Management Paper Page 3

ahead-of-schedule completion philosophy. The hundreds of landmark infrastructures constructed

landmark infrastructures that DMCI built include:

• SM Megamall (Mandaluyong City)

• Mactan Shangri-La Hotel (Mactan, Lapu-Lapu City, Cebu)

• Makati Shangri-La (Makati City)

• Shangri-La Resorts & Spa Boracay (Malay, Aklan)

• Manila Hotel (Rizal Park, Manila)

• Cultural Center of the Philippines Complex (Roxas Boulevard, Pasay City)

• Ayala Tower One (Makati City)

• The New Istana Palace (Sultan’s Palace, Brunei, Darussalam)

• The Asian Hospital (Filinvest Corporate City, Muntinlupa)

• NAIA Expressway Phase 2

• Metro Manila Skyway Stage 3 (Sections 1&2)

• LRT Line 2 East Extension (Masinag Extension)

DMCI Homes – Strategic Management Paper Page 5

point to robust demand for private – sector-led building.

DMCI Homes – Strategic Management Paper Page 6

RESEARCH DESIGN AND METHODOLOGY

2.1 DATA AND INFORMATION

2.1.1 RESEARCH DESIGN

Descriptive research is aimed at casting light on current issues or problems through a

management paper objects to analyze the current condition of the company.

2.1.2 RESEARCH DATA

DMCI Homes – Strategic Management Paper Page 7

gathered from the different sources.

DMCI Homes – Strategic Management Paper Page 8

3.1 GENERAL ENVIRONMENT

3.1.1 POLITICAL AND GOVERNMENTAL FORCES

3.1.1.1 TAX REFORM ACCELERATION AND INCLUSION LAW (R.A 10963)

consumers to live in their permanent residences rather than leasing condominiums.

3.1.2 ECONOMIC FORCES

3.1.2.1 GROSS DOMESTIC PRODUCT INCREASED BY 6.9% IN 2017

construction (5 percent) are the most important.

3.1.2.2 REAL ESTATE, RENTING, AND OTHER BUSINESS ACTIVITIES (RERBA)

3.1.2.3 TOURISM DRIVEN DEMAND

in the tourism industry by investing in condotel developments.

demand for accommodations.

3.1.2.4 RISING BUSINESS PROCESS OUTSOURCING IN THE PHILIPPINES

these units to rent them out to BPOs workers or as halfway houses.

scale BPO workers can rent.

3.1.3 SOCIAL, CULTURAL AND DEMOGRAPHIC FORCES

3.1.3.1 EMPLOYMENT, UNEMPLOYMENT AND UNDEREMPLOYMENT RATES

15 years old and over.

for 48.2% and 47.0% of the workers in these subsectors, respectively.

include those high school graduates in the old curriculum.

boosting demand for compact household items.

rent is also higher than in remote rural areas.

contracts are not common for these types of rentals.

the residential market.

3.1.4 NATURAL ENVIRONMENT FORCES