Property owners count risks as Taal Volcano keeps rumbling

By Norman P. Aquino Special Reports Editor
Arjay L. Balinbin and Denise A. Valdez Reporters

FIVE YEARS AGO, Jack, a 71-year-old retired physician, bought a two-story house worth P11 million in the upland town of Alfonso in Cavite province, 16 kilometers away from one of the world’s smallest and active volcanoes — Taal Volcano.

“The risk is always there,” he said by telephone. “You buy a property that’s close to a volcano, so you always think ‘What if it erupts?’”

Philippine authorities forced thousands of residents near the volcano in Batangas province to evacuate on Sunday after it spewed a thick column of ash 14 kilometers into the sky. The ashfall reached as far as cities near the capital, forcing the nation’s financial markets to suspend trading and the Manila airport to close.

A “hazardous explosive eruption is possible within hours to days,” according to the Philippine Institute of Volcanology and Seismology.

“We expect interest from potential locators and investors in the heavily affected areas to weaken in the short term,” Janlo de los Reyes, research head at property consultant JLL Philippines, said in an e-mailed reply to questions.

“But we do anticipate a gradual recovery within the year and slightly longer before demand and appetite return to the same level,” he said.

Some businesses near Taal Volcano might close or relocate because of safety concerns, but most shops were likely to slowly resume operations once things have normalized, Mr. De los Reyes said.

Some analysts this week said the continued eruption of Taal Volcano risks the country’s utilities, agriculture, transport and tourism sectors, not to mention overall economic growth. Consumer prices could also spike due to temporary supply constraints, they said.

The government was making “quick estimates” on the economic costs of the volcano’s eruptions, Finance Secretary Carlos G. Dominguez III said on Monday.

The eruption is likely to affect hotel occupancy and retail sales in the area, and could damp demand for so-called condotels that use Taal Volcano and its surrounding lake as major attractions, said Joey Roi H. Bondoc, a senior manager at the Philippine office of Colliers International.

“Once the situation has stabilized, the Taal area and its vicinity could attract more tourists and this completes the cycle of recovery and appreciation of property prices,” he said in an e-mail.

One such tourist is Caleb-Josh L. Fonacier, a 35-year-old actuarial manager at Manulife Business Processing Services in Quezon City.

Mr. Fonacier’s scheduled garden wedding at a farm overlooking Taal Volcano and Taal Lake on Jan. 30 hangs in the balance after the eruption.

“I’m still hopeful the wedding will proceed as planned,” he said in an interview. “Of course I worry about it. I’m not sure if I can in good conscience allow my guests to risk their lives for my wedding, knowing that the volcano could still erupt any time soon.”

Batangas province contributed a third or about 2.079 million of the 7.05 million overnight travelers in the Calabarzon Region — made up of the provinces of Cavite, Laguna, Batangas, Rizal and Quezon — in 2018, according to data from the Tourism department.

More than 595,000 travelers stayed in the town of Talisay, the jump-off point to Taal Volcano’s main crater lake.

CONDO SALES
Mr. Bondoc said the Cavite-Laguna-Batangas corridor — the country’s primary industrial hub — might experience a dip in economic output due to temporary logistical issues. “But it is likely to continue to fuel the region’s economic growth.”

The Calabarzon Region is also one of the major sources of Filipinos working overseas, and “we see household consumption sustaining its contribution to the region’s growth,” Mr. Bondoc said.

“Understandably, we may see some property owners decide to sell their property and relocate elsewhere until things have settled,” JLL’s Mr. De los Reyes said. “We still expect majority of residents to keep their homes despite the situation unless policies are enacted that will require them otherwise.”

Condominium sales in Tagaytay City — a popular holiday town south of Manila that sits on a ridge above Taal Volcano Island and Taal Lake — have been falling since 2018 due to slower launches by developers amid stricter building rules, Mr. Bondoc said.

Sales of condominiums, which cost P83,000 to P160,000 a square meter in Tagaytay, were expected to have fallen to P1.2 billion last year from P1.62 billion a year earlier, according to the property consultant. Compare this with sales of P2.2 billion in 2016 and P2.74 billion in the following year.

“Some individual owners are likely to let go of their properties,” Mr. Bondoc said. “But some opportunistic buyers are expected to take advantage of the decline in property prices in the near term,” he added.

Jack, mentioned at the outset, does not plan to sell his 300-square-meter house near the volcano soon. “We are pretty much happy here. We don’t have any major issues. Of course, I don’t expect the volcano to erupt throughout the entire year, but that’s something that I have to live with.”