PHILIPPINE ASSOCIATION OF REALTY CONSULTANTS &

SPECIALISTS, INC. (PARCS)

THE ESTANISLAO RESIDENCES

ENGAGING INTO SMALL-SCALE REAL ESTATE INVESTMENT
DEVELOPMENT DURING PANDEMIC
A 3-Storey 2-Unit Residential Apartment Building with Roof Deck
Development
#596 Estanislao St., Malibay, Pasay City

By:

ROLANDO B. PAGTOLON-AN

January 2021

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THE ESTANISLAO RESIDENCES

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I. PROJECT SUMMARY

A. NAME OF PROJECT

THE ESTANISLAO RESIDENCES: A 3-STOREY 2-UNIT

RESIDENTIAL APARTMENT BUILDING WITH ROOFDECK
DEVELOPMENT

B. LOCATION

The proposed small yet promising project will be developed at

#596 Estanislao St., Malibay, Pasay City, one of the most populated
area in one of the most highly urbanized cities in Metro Manila. It will
be developed within the high-density residential hub of the said City
wherein nearby travel, leisure and entertainment establishments are
booming.

The lot is classified as residential and with a small area of area

of fifty (50) square meters and at present, an old 2-storey house built
thereon ready to be demolished.

C. DEFINITION OF THE PROJECT

The proposed project will be named ESTANISLAO

RESIDENCES. The word “ESTANISLAO” is the last name of the
registered owner of the property, the late spouses AQUILINO

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ESTANISLAO married to FLORENCIA F. ESTANISLAO. The
proponent of the said project is DANILO ESTANISLAO, the heir of the
late spouses, who adjudicated to himself the old house and lot on
which the proposed project will be developed.

The project will create employment for the construction of the

building as well as its administration once fully-operational that would
ultimately contribute additional payment of taxes for both the local
government unit of Pasay and the national government even if it is a
relatively small project.

D. PROJECT OBJECTIVES

The project objective is to develop a residential building

categorized as a 3-storey apartment with two (2) units both for lease to
cater the needs of working professionals, couples and young family of
middle-income strata who wanted to live right in the middle of Pasay
City.

The project intends to:

1. Develop the fifty (50) square meter lot with an old house into
an apartment building with a total leasable area of one
hundred fifty (150) square meters to derive passive income;

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 2. Produce two (2) residential units of three-storey level with
roofdeck at the top;

3. Contribute in the growing demand of residential apartment

supply for lease in the area and nearby places;

4. Create job opportunities and generate additional income that

would contribute to the economy of the locality and the
country;

5. Generate a net profit at the end of the project by giving just

and equitable playing field between the project owner/lessor,
lessees, and the government.

E. FEASIBILITY CRITERIA

1. MARKET STUDY

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 Market study shows that the Philippine economy enjoyed a
satisfactory performance as shown in its increased Gross Domestic
Product wherein it is expected to reach at 360.00 USD billion by the
end of 2020. This means a better economy, hence, more business
opportunities, and thus, would increase employment.

The increase in the Overseas Filipino Workers’ (OFWs’)

remittances, the increasing number of employment opportunities
especially in Metro Manila and the promising high employment rate of
90% this 2020 in the entire country despite the pandemic situation
indicate a solid proof that majority of the Filipinos especially those living
in Metropolitan areas are capable and financially able to lease
residential properties.

2. TECHNICAL STUDY

The project will be developed in a high density residential area,

hence, with an existing residential community. It will be developed
following the generally accepted principles of engineering, architecture
and environmental standards.

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 Therefore, the project as proposed is technically feasible and
legally permissible.

3. FINANCIAL STUDY

The purpose of the financial study is to determine the financial

viability of the project.

The lot is owned beneficially and possessed by the herein

project proponent, although the same is still registered under the name
of his deceased spouses. Proof of beneficial ownership is shown in the
attached Extrajudicial Settlement of Estate of the late spoues
AQUILINO ESTANISLAO married to FLORENCIA F. ESTANISLAO.
The client/project proponent has the capacity to fund the whole project
from his family savings out of earned income from employment as a
seaman and from the entire family’s TNVS operator business.

The client/project proponent aims to get a rate of return of

______% net of taxes after ____ of full operation with 100%
occupancy.

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 In light of the financial capability of the investor and the desire to
meet the preceding expected net profit ratio, the proposed project is
financially feasible.

4. SOCIO-ECONOMIC

The implementation of the project will generate employment

within the area or nearby places as well as additional income to the
supplier of construction materials and services which would result to an
increase in payment of local and national taxes.

After the completion of the project, the same can contribute to

the inventory of apartment buildings for lease to meet the high
demands for residential properties in the centre of Metro Manila.

Hence, the development of the proposed project is socially and

economically feasible.

5. ENVIRONMENTAL

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 The project will be developed in a lot specifically zoned as
residential. It has an existing old 2-storey house made of wood ready to
be demolished. Since the proposed project will be developed in a
residential community, the same will be considered environmentally
feasible taking into consideration that the location is a non-
environmental critical area.

F. HIGHLIGHTS OF THE PROJECT

1. HISTORY

As mentioned, the project will be developed in the area of

Malibay, one of the highly-populated 201 barangays of Pasay City.

Historically, before the occupation of the Americans in the

country, Malibay is a large field of rice and betel reaching the
Magallanes area of Makati. Malibay is formerly part of the district of
Paranaque back then. In 1905 however, Parañaque ceded the said
barangay to Pasay City.

The proposed project will be developed in a lot still

registered under the name of the late AQUILINO ESTANISLAO
married to FLORENCIA F. ESTANISLAO. In accordance with

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the extra-judicial settlement of estate executed by the heirs of the
aforementioned late spouses, ESTANISLAO ESTANISLAO inherited
the old house and lot on which the proposed project will
be developed.
The lot is covered by the following title with its technical
description, to wit:

“TRANSFER CERTIFICATE OF TITLE NO. 003-2013000372

A parcel of land (Lot 2-B of the subd. Plan, PSD-00-068917,

being a portion of lot 2, (LRC) PCS-5516, LRC REC. NO. 2484)
situated in Brgy. Malibay, Pasay City, Metro Manila, Island of Luzon.
Bounded on the SW., along line 1-2-3 by Estanislao Street 5.00 M.
wide; on the NW., along line 3-4 by lot 3; on the NE., along line 4-5 by
lot 4; on the NE., along line 5-6 by lot 5, all of (LRC) PCS-5516; and on
the SE., along lone 6-1 by lot 2-A of the subd. plan. Containing an area
of fifty (50) square meters, more or less.”

2. PROJECT TIMETABLE

The timetable in securing proper clearances, permits,

certifications, the new tax declaration and title under the name of
DANILO ESTANISLAO and all other registration requirements with
various government agencies require more or less one (1) month.

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 The construction and development of the project will be
completed in six (6) months excluding the activities mentioned above.

3. NATURE OF INDUSTRY

The project proponent agrees that the small development

project shall be registered as a single proprietorship with a trade name
“ESTANISLAO RESIDENCES”. It shall engage in leasing of residential
apartments.

Before the commencement of the operation of the apartment

building, the said business shall register with the different regulating
agencies such as but not limited to the Department of Trade and
Industry (DTI), business permits from the Pasay City LGU, tax
registration with the Bureau of Internal Revenue (BIR) and such other
regulating agencies that requires registration.

4. MODE OF FINANCING

The client/project proponent has the available resources to

finance the small project development. To lessen the costs of running

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this project and to maximize the profit, the clients opted to use the
available fund to develop and construct the project out of the family
savings earned from employment and business ownership.

The payment of the construction and development costs shall be

in instalment basis. 40% will be paid as a downpayment soon as the
building permit will be issued. The remaining costs shall be paid all
through the progression of the development.

5. INVESTMENT COSTS

The project shall require an estimated total investment of FOUR

MILLION FIVE HUNDRED NINETY FOUR THOUSAND TWO
HUNDRED EIGHTEEN AND 50/100 PESOS (PHP4,594,218.50),
consisting of:

a. Land acquisition (Settlement of Estate & Title Transfer)--- PHP484,154.50

b. Construction and development cost -----------

PHP3,840,064.00

c. Permits and licenses expenses--------------------

PHP100,000.00;

d. General administrative cost-----------------------PHP200,000.00

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 e. Professional engagement fees -------------------PHP120,000.00;

f. Contingency/Incidental cost -----------------------PHP50,000.00;

G. CONCLUSION OF THE STUDY

Having met the affirmative results of the project study as regards

Market, Technical, Financial, Socio-economic and Environmental
aspects, I therefore conclude that the project is feasible and workable.

H. LIMITING CONDITIONS

The project proponent acknowledges that he will be solely

responsible for the performance of work by the contractor, architect,
engineer, property management staff, and other individuals in
connection with the development, construction, operation,
management, administration and leasing of the residential units.

Any defects or deficiencies as to drawings, specifications, or any

items or work of any kind or nature prepared by third party in
connection with the development, construction, operation,

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management, administration and leasing of the subject residential units
shall not be attributed to the real estate consultant.

II. MARKET STUDY

A. MACRO ECONOMIC INDICATORS

1. GROSS DOMESTIC PRODUCT

Gross domestic product (GDP), is the total market value of the

goods and services produced by a country’s economy during a
specified period of time. It includes all final goods and services—that is,
those that are produced by the economic agents located in that country
regardless of their ownership and that are not resold in any form. It is
used throughout the world as the main measure of output and
economic activity

Based on the data from the Philippine Statistics Authority (PSA)

as of November 2020, the GDP of the Philippines recorded a growth
rate of 11.5 percent in the third quarter, compared to the previous
quarter’s growth rate of 16.9 percent.

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 Source: Philippine Statistics Authority

Despite the drop in the GDP as expected because of the

pandemic, the Philippine economy was able to bounce back in the 3 rd
quarter of 2020.

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 2. AVERAGE INFLATION RATE

The measuring factor for Average Inflation Rate is that when the
price level of goods and services rise, the value of currency reduces.
When the price level rises, each unit of currency buys fewer goods and
services; consequently inflation reflects a reduction in purchasing
power per unit of money. The chief measure of price inflation is the
inflation rate which is the percentage change in a general price index,
usually the consumer price index.

Based on the research by the Philippine Statistics Authority as

of November 05, 2020, the country’s headline inflation accelerated to
2.5 percent in October 2020, from 2.3 percent in September 2020. In
October 2019, inflation was posted at 0.8 percent.

This brings the year-to-date inflation for 2020 at 2.5 percent.

(Table A, and Figure 1)

Higher overall inflation was primarily brought about by the

increase in the inflation.

Inflation in NCR, likewise, went up to 2.5 percent in October

2020, from 2.2 percent in September 2020. In October 2019, inflation in
the area stood at 1.3 percent.

The annual increment of 2.6 percent in the index of food and

non-alcoholic beverages primarily pushed up the inflation in NCR. Also
contributing to the uptrend were the higher annual rates of mark-ups
observed in the indices of housing, water, electricity, gas, and other
fuels at 0.7 percent, and restaurant and miscellaneous goods and
services, 1.6 percent.

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 The annual rate in the index for recreation and culture declined
by -0.1 percent during the month, from zero annual growth in the
previous month.  The remaining commodity groups either had slower
annual gains or retained their previous month’s annual growth rates.

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 3. OFW DOLLAR REMITTANCES

The increase in Overseas Filipino Workers (OFW) remittances is

a big contributing factor in the economy. Based on the results of the
2019 Survey on Overseas Filipinos (2020 data is not yet available with
the Philippine Statistics Authority), the number of Overseas Filipino
Workers (OFWs) who worked abroad at any time during the period
April to September 2019 was estimated at 2.2 million. Overseas
Contract Workers (OCWs) or those with existing work contract

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comprised 96.8 percent of the total OFWs during the said period. The
rest who worked overseas without contract accounted for 3.2 percent.
For 2020, despite the fact that there has been a temporary
deployment ban of OFWs in the 1 st and 2nd quarters of the year due to
the restriction imposed by the Philippine government in connection to
the pandemic situation, the said deployment, however, was already
lifted. With this, the deployment of OFWs is already increasing again,
hence, more dollar remittances will be expected at the end of 2020 and
onwards.

4. LOCAL EMPLOYMENT RATE

Highlights of the October 2020 Labor Force Survey

(Source: Philippine Statistics Authority)

 
a. The country’s unemployment rate in October 2020 was
estimated at 8.7 percent.  This is equivalent to 3.8 million unemployed
Filipinos who are 15 years old and over. This unemployment rate is the
lowest since April this year although it is still higher than the 4.6
percent (or about 2.0 million unemployed Filipinos who are 15 years
old and over) in the same period a year ago.

b. Labor force participation rate (LFPR) in October 2020 was

58.7 percent or 43.6 million Filipinos reported as either employed or
unemployed. This is the second lowest LFPR reported in the history of
the Philippine labor market following the record low of 55.7 percent
reported in April 2020. In October 2019, the LFPR was posted at 61.4
percent, translating to 44.6 million Filipinos in October 2019.

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 c. Employment rate in October 2020 was reported at 91.3
percent. This translated to about 39.8 million employed Filipinos out of
the 43.6 million who were in the labor force.  This employment rate was
the highest since April 2020.  In October 2019, employment rate was
estimated at 95.4 percent or 42.5 million employed persons.

d. The weekly average hours worked increased since April

2020.  In October 2020, employed persons worked an average of 40.8
hours per week, an improvement from the 38.2 hours, and 35.0 hours
reported in July 2020, and April 2020, respectively. However, this is still
lower than the mean 42.0 hours per week reported in October 2019.

e. Employed persons reported with job but not at work was

estimated at 1.0 percent or 387 thousand in October 2020. This is the
lowest number reported since April 2020 with the Coronavirus disease
2019 (COVID-19) pandemic or community quarantines as the
paramount reasons expressed by most employed persons as reason
for having a job but not at work. In October 2019, 0.8 percent or 323
thousand employed persons were reported with job but not at work.

f. Underemployment rate further declined in October 2020 at

14.4 percent from the rates in April and July 2020 at 18.9 percent, and
17.3 percent, respectively. However, this underemployment rate is still
higher than the October 2019 rate at 12.8 percent. 

g. At the regional level, three regions still reported double-digit

unemployment rates. These are the National Capital Region (NCR),
which had the highest unemployment rate estimate at 12.4 percent,
followed by the Region I (Ilocos Region) at 11.5 percent, and the
Region IV-A (CALABARZON) at 11.0 percent.

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 B. MICRO ECONOMIC INDICATORS

1. ECONOMIC STATUS AND ACTIVITY

After four decades of rapid urbanization in Metropolitan Manila,

Pasay City has transformed into an important local corridor between
major urban centers. Its southwestern portion provides access between
the city of Manila in the north with cities and municipalities like
Parañaque, Las Piñas as well as the nearby municipalities in Cavite in
the south. Likewise, its southeastern portion links Parañaque,
Muntinlupa and Laguna with the cities of Manila, Makati, Mandaluyong
as well as Quezon City. In other words, Pasay City is a facilitator of
trade among its neighboring LGUs.

The city also serves as an international gateway not just to

Metro Manila but the whole Philippines with the existence of both the
domestic and international airports within its jurisdiction. The popularity
of the Baclaran Church in nearby Parañaque City has not only created
a religious devotion but has also intensified commercial activity that
has overflowed into Pasay City. This has brought about benefits to
Pasay City in the form of employment and more livelihood
opportunities, a more robust local economy, and a rise in property
values.

These benefits, however, are not without its attendant urban

problems of vehicular traffic congestion, blight, breakdown of services,
and an increase of urban poor dependent on the thriving economic
activities. Complementing Pasay City’s strategic location is its relatively
flat terrain, which has the capacity to absorb a large population and
intense commercial enterprises. Another feature that could work to its
advantage is its western coastline that could be expanded through
reclamation. In fact, a large portion of the city is already made up of

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reclaimed lands where prominent landmarks and national government
offices are now established.
Policy actions of neighboring LGUs are known to affect the city’s
economy. The apparent rise in business tax collections of the city
government, for example, was the result of the campaign by the
Parañaque City government against Baclaran vendors who reacted by
merely crossing the boundary into Pasay City. Likewise, the city has
benefited from the transfer of local investors who were discouraged by
Makati City’s ordinance that increased the rate of local taxes on
business enterprises.

On the other hand, the rising crime index that has discouraged
Pasay City’s legitimate investors was a direct result of criminal
elements moving into the city when Manila launched its intensive
campaign against drugs and other criminal activities. As a whole,
Pasay City has the basic fundamentals that could sustain its economic
machinery. It has highly educated and skilled manpower as well as
managers; adequate supply of electricity and water; excellent access
provided by light rail transit systems, excellent communication facilities,
road networks and airports; and some land for expansion.

The Political Economy of Pasay City. As an international

gateway and a transport corridor, Pasay City shares in the
administrative supervision of strategic roads such as Roxas Boulevard,
Harrison Road and Taft Avenue on the southwest and EDSA (C-4)
which runs from east to west. These linkages facilitate economic
interdependence. The efficiency of the city could be adversely affected
should vehicular traffic in Pasay City be left unattended.

Labor productivity among offices in the cities of Manila and

Makati shall somehow decrease because of the workers’ extended
travel, which shortens their working hours. This shall also affect the
earnings of people driving public conveyances who shall be
discouraged to ply their route in the area. Transportation costs of

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students from the cities of Parañaque and Las Piñas as well as those
from Cavite who study in Manila shall likewise increase, as they shall
be forced to take longer routes going to and from their schools. Such
unfavorable conditions have already occurred when the construction of
Metro Rail Transit facility in EDSA permanently diverted the traffic flow
that forced the motorists and travelers, particularly those going to the
airports, to take alternative routes. The City is host to the domestic and
the international airports. As an international gateway, Pasay City holds
the visitors’ first and last impression that is crucial to the Philippines’
business and industries, especially the tourism industry.

The city is like a corporate enterprise that needs to be

sustained. It has to compete for investment for it to generate tax
revenues, create livelihood and provide employment to its legitimate
residents. With its strategically located reclaimed properties along its
western coastline, the city could be competitive with its progressive
neighboring LGUs.

The Leading Industries of Pasay City Pasay City’s rapid

urbanization has seen the decline of traditional industries and their
replacement with more service-oriented types of livelihood and
industries. The rising population and the growing demand for their
immediate needs have caused too much pressure on land and the
surrounding environment. The demand for space and the subsequent
invasion of creeks and rivers by informal settlers has eased out
vegetable farming, fishing, livestock raising and the culture of marine
products.

The recent trend towards a global-oriented economy had

various impacts in the Philippines as the system promoted
consumerism that created a demand for service-oriented industries. In
Pasay City, such service industries took the form of financial services,
medical services, retail and general merchandising, recreation
services, public terminals, commercial garages, professional services,

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personal services, utility services, and light manufacturing. In 2020, a
total 8,461 enterprises were registered in the city. See Table 4.1

General Merchandising and Retail Of the numerous industries

recorded in 2020, the general merchandising and retail sector had the
biggest share with a total of 4,792 enterprises. This sector was
dominated by retail and general merchandising with1,964 and sari-sari
stores with 1,346. The others were dealer/trading marketing,
restaurants/ fastfoods, food chains, bakeshops and those engaged in
export activities.

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 The numbers presented above may even be more as
inspections by the city government often reveal that there are several
micro-enterprises operating without business licenses.

Professional Services had the second biggest share in the type

of industries in Pasay City with 1,394. This consisted of 385 private
agencies engaged in travel, security and labor recruitment, 668
establishments in land development; dealership and leasing; 155
general contractors; and 186 repair shops.

The 762 enterprises engaged in providing utility services

included 258 firms providing general services; 184 forwarders and
brokerage firms; and 231 that were either gasoline stations, funeral
parlors or warehouses. There were also 86 operating as non-stock and
non-profit institutions. Included in this category are the Manila Electric
Company, the Maynilad Waterworks, Inc., and the branch office of
PLDT.

Of the 462 establishments offering financial services in Pasay

City in 2000, there were 78 banks, 29 money-changers, 105
pawnshops, 18 lending investors, and 232 insurance agencies and
holdings. Banks cater to savers and entrepreneurs in need of capital
for their enterprises. Micro entrepreneurs, on the other hand, are not
afforded the same service and are forced to resort to underground
financing that charge as high as 20% for a 60-day period. Money-
changers cater to people and tourists who have foreign denominations
while pawnshops lend money to people who have valuable property
but lack the cash.

Businesses related to rest and recreation were also prevalent

economic activities in Pasay City. There were about 339 business
services that were classified as rest and recreation in 2020. Of this

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total, 168 were amusement centers and 122 were karaoke bars,
nightclubs and discos. The city had 20 high-end hotels and another 22
less luxurious lodging facilities.

Of the 258 enterprises under Personal Services, about 254

were beauty parlors operating mostly on the easements of major and
interior roads. The other four (4) enterprises were registered as lodging
houses.

There were 203 drug stores and optical clinics registered in

2020. The others were six (6) private hospitals, namely, the Manila
Sanitarium and Hospital, San Juan de Dios Hospital, Miraculous
Medical Hospital, Pasay Doctors Polyclinic, Balbido’s Clinical
Laboratory and Pasay- Parañaque Chest Clinic.

The 168 enterprises listed under the manufacturing/ fabrication

category were as varied as the retail and general merchandising. While
22 were generally classified as food manufacturers, the rest were
engaged in different crafts, such as metal and steel fabrication, spare
parts, cutlery, dress shops and tailoring shops.

There were 15 bus terminals observed in the city, many of

which are situated in the major thoroughfares such as EDSA or
circumferential Road 4. There were also nine (9) commercial garages
being used as terminals. The city government has allowed 15 terminals
for the operation of tricycles and pedicabs. Aside from public land
transportation terminals, the city is also host to two rail transit terminals
operated by Light Rail Transit and the Metro Rail Transit.

While private learning institutions perform a public function,

they are of course managed and owned by private investors expecting

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returns on their investments. Of the 36 private learning institutions,
three were private colleges, five were vocational schools and six were
flying schools. The remaining 14 schools cater to primary and
secondary education including the pre-school institutions.
Source: Pasay City Government website
https://www.pasay.gov.ph/Pdf/socio-eco/Local%20Economy4.pdf

2. POPULATION IN PASAY CITY BASED ON 2015 CENSUS

Source: Philippine Statistics Authority

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 3. NEIGHBORHOOD DATA

DISTANCES FROM THE PROJECT SITE

a. ESTABLISHMENT/LANDMARK/CHURCH

Name of Establishment Distance from the project

SLEX Entrance via EDSA Less than 1 km
SM Mall of Asia Less than 3 kms
Ayala Business District Less than 3 kms
Fort Bonifacio Less than 7 kms
Ninoy Aquino International Airport Less than 4 kms
Okada Manila Less than 5 kms
Resorts World Manila Less than 5 kms
Baclaran Church Less than 3 kms
LRT-MRT EDSA Station Less than 1 km

b. SCHOOLS

City University of Pasay Less than 2.5 kms

Apelo Cruz Elementary School Less than 250 meters
San Juan Nepomuceno School, Inc. Less than 250 meters
Timoteo Paez Elementary School Less than 250 meters

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Manila Adventist College Less than 6 kms
Manila Tytana Colleges Less than 2.5 kms
Asia Pacific College Less than 1 km
iACADEMY Less than 5 kms
National University-MOA Less than 3 kms
Arellano University School of Law Less than 10 kms
Arellano University-Pasay Less than 10 kms

c. GOVERNMENT AGENCIES

Department of Foreign Affairs Less than 10 kms

Philippine Airforce Less than 5 kms
GSIS Less than 5 kms
Securities & Exchange Commission Less than 5 kms
Pasay City Hall Less than 3 kms
SSS Pasay Less than 3.5 kms
Philippine Navy Less than 10 kms
Bangko Sentral ng Pilipinas Less than 10 kms

d. HOSPITALS

San Juan de Dios Hospital Less than 2 kms

Makati Medical Center Less than 15 kms
Ospital ng Maynila Less than 20 kms

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Manila Adventist Hospital Less than 7 kms

e. RESTAURANTS

Mcdonald’s Evangelista Makati Less than 250 meters

Chowking Evangelista Makati
Mang Inasal Malibay
Red Ribbon
Goldilocks
Jollibee Evangelista Makati
Less than 250 meters
Less than 100 meters
Less than 100 meters
Less than 100 meters
Less than 250 meters

f. BANKS

UCPB Less than 100 meters

BPI Family Savings Bank Less than 100 meters
PNB Less than 100 meters
Banco de Oro Less than 250 meters

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 THE SM MALL OF ASIA COMPLEX

THE MAKATI CENTRAL BUSINESS DISTRICT

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THE BONIFACIO GLOBAL CITY

RESORTS WORLD MANILA

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NINOY AQUINO INTERNATIONAL AIRPORT

OUR MOTHER OF PERPETUAL HELP PARISH

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 MANILA TYTANA COLLEGES

DEPARTMENT OF FOREIGN AFFAIRS

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 C. MARKET STUDY

The leasing of the units will be performed by a property

management staff/leasing staff to be employed by the client/propject
proponent. The said staff will utilize innovative tools in advertising the
residential units such as the use of social media and online property
lease platforms such as olx.com, property.ph and lamudi.com.
The client/project proponent is optimistic to lease the
residential units in a short span of time since there is strong demand
for residential apartments in the area.

1. SUPPLY AND COMPETITION

Pasay City is considered a good market place of residential

units for lease not only because of its booming economy but also
because of its location wherein the cities of Manila and Makati are
nearby.
The rental fees for residential apartments in the cities of Manila
and Makati are relatively higher compared to that in Pasay especially in
a middle-class community that is Malibay. Moreover, there are also
similar apartment for lease in Malibay area which have rental fees that
are likewise relatively expensive than the project’s intended monthly
rental fee.

ITEM AGENT LOCATION DESCRIPTION RENTAL

FEE
I Lamudi M. Reyes A 60 sqm 2- PHP19,000.00

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 Street, near bedroom 2-
Gen. Estrella storey
StreetBangka apartment
l, Makati with kitchen,
bathroom and
laundry are,
fully-
furnished

II Lamudi 1233, Makati, A 60 sqm 2- PHP20,000.00

Bangkal, bedroom
Capt. M. apartment,
Reyes bare type
Bangkal,
Makati

III Lamudi 2510 Aurora A 65 sqm 2- PHP14,000.00

St., Pasay storey
City apartment,
bare type

IV Lamudi Barangay A 60 sqm 2 PHP15,000.00

190, Bonanza bedroom
Drive, Don apartment,
Carlos semi-
Village, furnished
Pasay City
(near the
airport)

V Lamudi 34 Gen. M. A 90 sqm 3 PHP20,000.00

Hizon storey
Bangkal, apartment,
Makati semi
furnished

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PROPERTY ITEM No. 1

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PROPERY ITEM NO. 2

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PROPERTY ITEM NO. 3

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PROPERTY ITEM NO. 4

2.

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PROPERTY ITEM NO. 5

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 D. DEMAND

The demand for apartment units for lease in Metro Manila has
been growing steadfastly, even despite the fact that recently pandemic
has consumed the nation. However, there is still a large deficit in the
inventory especially that the construction of new apartment buildings
were halted due to the pandemic

Given the large and continuous grow in population density of

Pasay City, the demand for apartment units for leasing will definitely
follow.

The fact that more and more businesses opened and had
prosper in the city coupled with the seemingly increasing employment
opportunities in Pasay and nearby cities, the housing for lease demand
is really flourishing.

3. SWOT ANALYSIS

A. STRENGTHS

1.The residential apartment building is of good quality and is

modern in design
2. The area is safe since it is gated with a security personnel
3. Public transportation is available 24 hours
4. Walking distance to LRT-MRT station in EDSA cor. Taft

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 5. Located in a residential area near the Central Business
Districts of Makati and the Mall of Asia complex

B. WEAKNESSES

The area is located in the highly populated area of Pasay City

Moreover, the apartment building has no parking spaces.

Hence, lessees will have difficulty finding parking spaces for their cars
should they have one.

Pets, such as dogs and cats, will not be allowed in the

apartment.

C. OPPORTUNITIES

The growth in the economy is largely dependent in the

population growth. When the economy is well, it would result to
a rising demand for the products and the demand for more
people to produce them. This would contribute to an increase
in demand for employment and the opportunity to seek housing
for lease that is relatively near workplaces.

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 D. THREATS

1. Client’s desire to live in a condominium in the central

business district rather in an apartment in a middle class
community;
2. The future client’s desire to live outside the Metro especially
in Cavite area; and
3. The variable prices of construction materials.

III. TECHNICAL STUDY

A. THE PROJECT

1. LOCATION

The proposed project will be developed at #569 Estanislao St.,

Malibay, Pasay City.

The place is a developed residential area surrounded by

existing residential houses. The area is classified as High density
residential area (R3).

Pasay City is considered as the travel and entertainment city

since part of the Ninoy Aquino International Airport is located in the

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city. The Mall of Asia complex as well as the new district of ASEANA
City where casinos thrive are likewise located thereon.

SOUTHEST ASIA MAP

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THE PHILIPPINE MAP

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THE METRO MANILA MAP

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PASAY CITY MAP

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MALIBAY, PASAY MAP

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 ENTRANCE OF MALIBAY

LOCATION OF THE PROJECT

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VICNITY OF THE PROJECT

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 2. LAND USE PLANNING

Based on the land use map zoning of Pasay City, the

location of the proposed project is classified as residential R3 High
Density Residential Zone. Pasay City has a total of 201 barangays
grouped into 20 zones and 2 districts. With the said zoning, the
proposed project is very well placed.

3. OWNERSHIP

The project has a total land area of fifty (50) square meters.
The lot is rectangular in shape.

As earlier mentioned, the title covering the lot of the project

is still registered under the name of the late AQUILINO ESTANISLAO
married to FLORENCIA ESTANISLAO, the father and mother of the
project proponent. An extrajudicial settlement of estate has been
executed by the heirs of the deceased spouses wherein the project
proponent has adjudicated to himself the lot where the project will be
developed and that the other heirs waived their rights thereto. A copy
of the said extrajudicial settlement of estate is attached below.

Title to the property will still have to be transferred from the

aforesaid deceased spouses to DANILO ESTANISLAO. This title
transfer service is part of the services and engagement fees of the
herein undersigned real estate consultant.

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EXTRAJUDICIAL SETTLEMENT OF ESTATE OF AQUILINO
ESTINISLAO and FLORENCIA ESTANISLAO

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Page 56 of 93
 TRANSFER CERTIFICATE OF TITLE
(Still registered under the names of the deceased parent)

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Page 58 of 93
 REAL PROPERTY TAX COMPUTATION
(Still registered under the name of the deceased parent)

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 4. APARTMENT BUILDING DESCRIPTION

The proposed project shall produce two (2) apartment units.

The total floor area for the 3-storey apartment is 150 square meters
area for each unit. The project is designed to promote comfort mainly
for working professionals, couples and young families who wanted to
live near their workplaces in Pasay, Makati and Manila areas.

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 The project has a roofdeck, a mini-guardhouse and mini-
administration building/receiving area at the groundfloor. It is likewise
gated. It will be equipped with CCTV surveillance cameras,
underground facilities for telephone lines and electricity.

Each unit has a lavatory/kitchen, a toilet and bath and a mini

service and laundry area. At the top of the 3 rd floor is a roofdeck.

The 2 residential apartment shall be developed in the following

manner: The (3) storey residential building, the 2 bathrooms, kitchen,
service area, hallway, laundry and drying area.

a. Apartment Components and Description are shown

below:

1. 3-Storey-Residential Apartment 1
Floor area 150 square meters
Lot Area 50 square meters
Features:
Ground Floor:
 Living Room
 Kitchen
 Dining Area
 Toilet & Bath
 Service Area
2nd Floor:
 Provision for Master Bedroom

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3rd Floor:
 Provision for 1 –bedroom
Roofdeck:
 Laundry & Drying Area

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2. LOT PLAN

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3. SITE DEVELOPMENT PLAN

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4. FLOOR PLAN

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 B. CONSTRUCTION PROCESS

The owner shall seek the service of licensed engineer/s and

architect. The service shall include the estimated and detailed cost of
the project, the bill of materials, design and specifications.

The construction process includes planning, design and the

actual implementation of the construction activity until the completion of
the project.

The design as to architectural, structural and electrical shall be

prepared in accordance with the desired feature of the proponent. The
detailed estimate of cost of the project shall only be prepared upon
approval of the design by the project proponent. The said architectural,
structural and electrical design must conform to the rules provided
under the Building Code of the Philippines.

The owner shall hire the service of outside contractor to do the

construction works but with coordination of the independent
architect/engineer.

C. CONSTRUCTION SCHEDULE

The preparation for planning and design or pre-construction

activities shall be completed in one (1) month which likewise includes
the securing of permits and licenses.

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 The construction of the building excluding the planning and
securing of permits and subdivision and titling activity shall be finished
in six (6) months.

The pre-construction and construction activity shall include the

following:

a. Pre-construction:

1. Planning and Design

2. Securing Permits and Licenses
3. Settlement of Estate Extrajudicially and Title Transfer

b. Construction Activity

1..Mobilization/ Demobilization/ Demolition- pre-

construction activities, testing, etc.
2. Earthwork/Site works- site preparation
3.Concreting Works- formworks/ scaffolding/ rebars/
concreting
4. Masonry works- chb, plastering
5..Carpentry works- dry wall/ doors/ stairs/ ceiling/
cabinets/ laminated roofing
6. Steel Works- decking, roof framing
7. Roofing Work
8. Plumbing/ Sanitary/ Drainage Works

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 9. Electrical Works
10.Architectural Works- various finishing/ fileworks/
windows
11. Painting Works
12. Utilities/ Water & Power
13. Cleaning
14. Occupancy Permit

CONSTRUCTION SCHEDULE

NUMBER OF MONTHS 1 2 3 4 5 6 7
Planning and Design
Processing- Permits and
Licenses
Mobilization/ Demobilization
Earth Works/ Site Preparation
Concreting/ Form Works
Masonry Works/ CHB/
Plastering
Carpentry Works
Steel Works, Decking, Roof
Framing
Roofing Works
Plumbing/ Sanitary/ Drainage
Works
Electrical Works
Architectural Works- Various
Finishing/ Tile Works/
Windows
Painting Works
Utilities/ Power/ Water
Cleaning

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 D. MACHINERY AND EQUIPMENT

All machineries and equipment needed in the demolition,

construction and development shall be provided by the outside
contractor including the scaffoldings and other necessary equipment to
complete the project.

E. LOCATION

The project site is located at #569 Estanislao St., Malibay,

Pasay City. The site is along a concreted road with existing residential
houses within the vicinity.

The utilities needed in the construction like water and electricity

as well as communication are readily available. The area is likewise
flood-free.

F. UTILITIES AND FACILITIES

Utilities and facilities provider that are available in the area are
Meralco for electricity, Maynilad Water for water, PLDT, Smart, Globe,
Sun Cellular, Sky Cable, Destiny, Cignal TV, Cable Link, and Dream
Satellite TV, Telecommunications as well as internet service providers
are also ready within the premise of the project.

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 The public transportation are available twenty-four (24) hours
like bus, jeepney, taxicab, MRT, tricycle and grab car.

The community facilities such as schools private and public,

churches, hospitals and clinics and other government agencies are
accessible from the area. Collection of garbage, security and other
facilities are maintained by the local government of Pasay City.

G. CONSTRUCTION COST

The details of the bill of materials, labor costs and contractors

profit are found in appendix page.

The estimated costs to construct 1 unit of the proposed

apartment building are as follows:

Type of Cost Amount

Mobilization 20,000.00
Demolition 31,250.00
Carpentry Works 63,239.00
Formworks 89,275.00
Masonry Works 609,145.00
Steel Works 542,775.00
Tile Works 100,065.00
Painting Works 66,364.00

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 Doors & Windows 105,000.00
Plumbing Works 136,516.75
Electrical Works 131,402.25
Miscellaneous 25,000.00
Total PHP1,920,032.00

Hence, for 2 units, the project will cost PHP3,840,064.00.

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H. CONSTRUCTION ORGANIZATION

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 I. RENTAL RATES

In the process of making a decision, the rental rates is a big

factor. However, the owner shall at all times take into consideration the
quality of the unit produced as well as the affordability without
sacrificing the satisfaction, security and safety of the customers.

Upon completion of the project, the rental rates shall be set at

PHP12,000.00 per month with an increase of 10% for every 3 years
thereafter.

IV. ORGANIZATION AND MANAGEMENT STUDY

A. FORM OF OWNERSHIP

The project proponent is an individual and shall register as

single proprietor under the trade name ESTANISLAO RESIDENCES.
The proponent has a plan to form a corporation in the future once the
said residential buildings for lease business will prosper in the coming
years.

Before the commencement of operation, the project owner

shall register to the following agencies:

1. Department of Trade and Industry (DTI);

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2. Business Permits and Licensing Office (BPLO) for the
business permits;
3..Bureau of Internal Revenuew (BIR) for issuance of
Certificate of Registration (COR), Authority to Print (ATP)
for Receipts and Books of Accounts wherein all daily
transactions are being recorded.

B. ORGANIZATIONAL CHART

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 V. ENVIRONMENTAL STUDY

The project is located in a developed residential area with

existing houses and apartment buildings. It is classified as R3 or high
density residential area in which apartment buildings are allowed to
be constructed.

Therefore, the project is considered as a Non-Environmental

Critical Area. Hence, it is environmentally feasible.

VI. SOCIO ECONOMIC STUDY

A. EMPLOYMENT AND INCOME

The implementation of the project development will create jobs

for both skilled, non-skilled and professionals that would provide
source of living. Construction process includes planning, design, and
the actual implementation of the construction activity until the
completion of the project.

The project proponent shall hire licensed engineer/s and an

architect for the architectural, structural and electrical design of the
project while the independent contractor shall hire labourers,
construction workers, and machine operator for the construction.

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 The project proponent, through the contractor, shall procure
materials to be used in demolition and in construction, and hire
property management staff, security personnel and other staff to
manage and administer the property. This would contribute additional
income to both the workforce and supplier, thus, improving their
quality of lives.

B. TAXES & GOVERNMENT FEES

Taxes are the enforced proportional contributions from persons

and property levied by the law-making body of the State by virtue of
sovereignty for the support of the government and all public needs.
Same goes with governmental fees such as licensing fees, which are
levied to support public needs. These are the lifeblood of the nation
and are used to finance the basic services provided by the
government to the people, such as healthcare, education,
infrastructure and other expenditures that are vital to the economic
growth of the country.

More tax collections mean more opportunity to enlarge the

priorities or expenditures that are vital to the economic growth of the
country.

The project shall contribute additional taxes to be the local and

national government such as but not limited to the following:

B.1. Local Government/ Assessor’s Office/ Office of the

Barangay

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The abovementioned agencies shall benefit for the payment of
the following taxes and licensing fees:

1. City, Business Permit and licenses;

2. Real Property Tax (RPT) for 2020 based on the assessed
value of PHP160,000.00 plus penalties and Special
Education Fund;

3. Basic community tax of PHP5.00 plus PHP1.00 for every

PHP1,000.00 but not to exceed PHP5,000.00;

4. Transfer Tax of 75% of 1% of the total consideration or

the fair market value, whichever is higher.

5. Registration fee on transfer of property to the Register of

Deeds in this case the rate is PHP8,796.00 for the first
PHP1,700,000.00 plus PHP90.00 for every
PHP20,000.00 in excess of PHP1,700,000.00;

6. Building/ occupancy permit the payment of which

depends on the size of the building (this is already
included in the contractor’s cost); and

7. Clearances and other certification fee (locational, fire,

barangay, etc. and such other fees of other regulating
agencies (this is already included in the contractor’s cost).

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 B.2. NATIONAL GOVERNMENT- BUREAU OF INTERNAL
REVENUE

The national government, specifically the Bureau of Internal

Revenue (BIR), shall benefit for the payment of the following
taxes:

a..On payment of fees rendered by the contractor,

engineer/s, architect and consultants at a variable rate of
2%, 5% 10% or 15%;

b. Estate Tax of 6% based on the net estate of the deceased

at the time of death plus applicable penalties, interest and
surcharges. Estate tax amnesty can still be availed of,
hence, no payment of penalties, interest and surcharges;

c. Documentary Stamp Tax based on whichever is higher

between the net estate and the fair market value for title
transfer. There is also DST for lease agreements imposed
at the rate of Php6.00 for the first Php2,000.00 and an
additional Php2.00 for every Php1,000.00 in excess of the
first Php2,000.00;

d. Percentage tax on the rental fees at the rate of 3% of the

gross receipts;

e. Income tax ranging from 15% to 25% % of the taxable

base for the individual taxpayer; and

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 f. Certification fees of PHP100.00 and loose stamp of
PHP15.00 for the Certificate Authorizing Registration
(CAR).

The project owner shall register the business immediately at

the start of the commercial operations to concerned regulating
government agencies like the Department of Trade and Industry
(DTI), Business Permit and Licensing Office (BPLO) of the local
government unit of Pasay City and the Bureau of Internal
Revenue (BIR).

The project proponent as a single proprietor is subject to tax

at the rate applicable to an individual as enumerated above. A
pro-forma financial statement was prepared showing the
projected volume of revenues, cost of production and expenses
related in the pursuit of the business of the project proponent, as
well as the taxes that shall be paid.

Projected taxes and fees to the government except fees to

other regulating agencies were also prepared. All figures were
based on cost and revenue assumptions in order to give the
proponent an idea or hindsight in this kind of industry.

B.3. COMPUTATION OF APPLICABLE TAXES/FEES

1. LOCAL GOVERNMENT

a. Real Property Tax (For year 2020)

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1st qtr. 40,000 AV= PHP150 Basic Tax PHP42 Penalty PHP100 SEF PHP25 Penalty

2nd qtr. 40,000 AV= PHP150 Basic Tax PHP42 Penalty PHP100 SEF PHP25 Penalty

3rd qtr. 40,000 AV= PHP150 Basic Tax PHP42 Penalty PHP100 SEF PHP25 Penalty

4th qtr. 40,000 AV= PHP150 Basic Tax PHP42 Penalty PHP100 SEF PHP25 Penalty

PHP600 + PHP168 + PHP400 + PHP100

Total = PHP1,268.00

b.Transfer Tax- Rate of .75% based on the total

consideration (net estate) or zonal value, whichever is
higher, plus surcharges and penalties computed as
follows:

PHP900,000.00 net estate x .75% + 25% surcharge + 72% penalty

= PHP6,750 + 226,687.5 + 169,965

= PHP403,402.5

c. Registration Fee
First 1.7 million= PHP8,796.00
PHP900,000 net estate = PHP8,796.00

3. NATIONAL GOVERNMENT

a. Estate Tax for the settlement of estate

PHP 900,000 net estate x 6%= PHP54,000.00

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 (availed the estate tax amnesty)

b. Documentary Stamp Tax of ____ % based on BIR zonal

value, or Assessor’s Value, whichever is higher.
For Title Transfer:
1.5% x PHP900,000 net estate= PHP13,500.00
For Lease Agreements (contract is for 2 years):
Total of PHP24,000.00 monthly rental fee, DST will be
imposed at the rate of Php6.00 for the first Php2,000.00
and an additional Php2.00 for every Php1,000.00 in
excess of the first Php2,000.00
= PHP50.00/ month x 12 months x 2 years =
PHP1,200.00

d. Percentage tax on the rental fees in the rate of 3%;

PHP288,000 annual gross receipts x 3%= PHP8,640.00

e. Income tax ranging from 5% to 32% of the taxable base for

the individual taxpayer.

Taxable Taxable Taxable

Period Period 2022 Period 2023
2021
Income 144,000 288,000 288,000
Tax Due
Tax Rate Exempt 20% of 20% of
excess over excess over
PHP250,000 PHP250,000
Income None PHP7,600 PHP7,600
Tax

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 Payable

RECAPITULATION OF TAXES/FEES:

LOCAL
a. Real Property Tax- PHP1,628.00
b. Transfer Tax- PHP403,402.5
c. Registration Fee- PHP8,796.00
--------------------------
PHP413,826.50
NATIONAL
a. Estate Tax- PHP54,000.00
b. Documentary Stamp Tax- PHP14,700.00
c. Percentage tax- PHP8,640.00
d. Income tax- PHP15,200.00
--------------------------
PHP 92,540.00

GRAND TOTAL= PHP506,366.50

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 C. SUPPLY OF PRODUCT AND SERVICES

The supplier of services and construction materials as the key

player in the development of the project shall also derive additional
income. Moreover, they shall also contribute additional taxes to both
local and national government.

D. DEMAND FOR MATERIALS

The demand in construction supply shall automatically increase

specifically the hardware products and other materials needed in the
development thereby contributing additional taxes for both local and
national government.

VII. FINANCIAL STUDY

A. FINANCIAL ASSUMPTIONS

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 The financial study shall provide concept or idea on the part of
the owner whether the project is financially viable or the other way
around. It will also serve as a guide or tool to finance and continue the
development. The project study shows the following scheme:

1. The lot is still under the name of the deceased parents,

hence, for settlement of estate and title transfer, the cost
will be PHP. This is already included in the fees paid to
the real estate consultant who will facilitate the processing
thereof.

2. The project proponent shall infuse initial capital in the

amount of PHP1,536,025.60.

3. The apartment units shall be leased soon after the end of

the construction of the building because of higher
demands in the market.

B. TOTAL PROJECT COST

The total project cost to be incurred in the development is

as follows:

B.1. LAND ACQUISITION (SETTLEMENT OF ESTATE &

TITLE TRANSFER)

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 Considering the cost for the settlement of estate of the
original registered owners and the title transfer fees, the cost of
the acquisition of the land is amounting to PHP484,154.50.

B.2. DEMOLITION, CONSTRUCTION AND LAND

DEVELOPMENT COST

The demolition, land development and the construction cost

includes the construction cost, mobilization/demobilization, earthworks,
site works, road works, drainage, storm drain, sewage system,
waterline works, water, gas, electricity, telecommunications, entrance
gate, guard and guard house, decorative fence, landscaping, survey
works, power supply, permits and licenses such as development
permit, building permit, subdivision, occupancy permit, license to sell
plus contingencies and other incidental expenses based on the study
shall be in the total amount of PHP3,840,064.00.

B3. GENERAL ADMINISTRATIVE COSTS

The general and administrative expenses that shall incur in

the operation include salaries and wages, office rental, office supplies,
professional fees, power and electricity, water, telecommunication,
transportation and travel, security and janitorial, marketing and
promotions, advertising, insurance expense, repairs and maintenance,

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taxes and licenses, depreciation and other miscellaneous expenses
amounts to PHP200,000.00.

B.4. PROFESSIONAL ENGAGEMENT FEES

Professional engagement fees for the real estate consultant is

amounting to PHP120,000.00.

B.5 CONTIGENCY COST

Incidental cost as regards demolition, construction and land

development amounts to PHP50,000.00.

C. SOURCES OF FINANCING

Since the project proponent owns the lot where the project
shall be developed and only the settlement of estate fees as well as
title transfer fees shall be paid, this saves costs to the proponent as to
land acquisition expenses. With this, the proponent is confident that he
can finance the project out of his own funds.

The alternative investment scheme presented to the

proponent are as follows:

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 1. Use the available resources to finance the project and
earn a net income after tax of PHP_____________ with a
net profit ratio of ___% or return of investment of ____%.

2. Avail the short developmental loan being offered by the

bank at an interest rate of 5.25% and will incur a finance
cot of ____________ for 6 months period and the net
profit after interest and taxes would be
PHP___________________.

Although there are several banks that offer the so-called

Developmental Loan or Revolving Credit Line at a rate ranging from
5.25% to 5.75%, the proponent still prefer to fund the project in order
not to incur additional cost specifically financing cost and to maximize
the net profit for the project.

Considering the above study, it is a prudent decision to utilize

the available funds as presented under item number 1. At this juncture,
the capital infusion is in the total cash amount of
PHP_______________.

D. FINANCIAL ANALYSIS

The sources of revenue are from rental fees of the produced

residential apartment units soon after the construction of the building is
done.

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1. PROFITABILITY

Financial measures have been undertaken

PAYBACK PERIOD

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RETURN ON INVESTMENT

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INTERNAL RATE OF RETURN

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FINANCIAL VIABILITY

PROJECTED BALANCE SHEET

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 PROJECT INCOME STATEMENT

2021 2022 2023

Gross
Revenues
Rental Fees
Gross Income
Operating
Expenses
Net Before Tax
Income Tax
NET PROFIT
AFTER TAX

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 VIII. RECOMMENDATION

The Project Feasibility Study shows that it is legally

permissible, physically and technically possible, financially feasible,
socio-economically viable and desirable.

It is therefore recommended that the project be implemented.

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