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‘MANILA—In the bustling Chinatown here, a Philippine conglomerate is banking on Chinese retirees, part of an aggressive joint effort with the government to lure graying Asians to its shores.
Chinese retirees have already bought 320 condos in one building in the CityPlace development for about $150,000 each and the company is targeting that same market for another tower it is building nearby, said Wilson Sy, the assistant vice president of the developer, Megaworld.
Many of the town’s market stalls are now owned by Chinese retirees, and shops at the Lucky Chinatown Mall next door have installed Chinese signage to make them feel more at home.
“They come in here to eat noodles, often in their pajamas—like in China,” Mr. Sy said.
These retirees are the beginning of what the Philippine government and developers hope to turn into a top industry: the retirement business.
This year, the country is on pace to welcome a record 6,000 new foreign retirees—more than triple the number that arrived in 2009, says the Philippine Retirement Authority.
The agency tasked with enticing older expats wants to more than double their number to 100,000 in the next five years from 43,500 today, and eventually reach one million in a country of 100 million.
The main retirees settling in the Philippines come from China, Japan, South Korea and Taiwan, countries that already have well-established trade and tourism links here.
The Philippines has been trying to lure foreign retirees for 30 years, but the results had been lackluster. Though sunny and cheap, the unstable and impoverished country was generally seen as a poor choice for a trouble-free retirement.
But now a combination of factors is finally giving the project traction, officials say. The government has made it extremely cheap to settle in the Philippines, dropping the amount retirees must keep in a local bank to $20,000 from $75,000, for example, and allowing foreigners to qualify at just 35 years old.
Meanwhile, developers, seeing the opportunity, are tailoring new projects to appeal to certain foreigners, like adding a bonsai park for Japanese retirees. And, because Asian retirees are often looking for good investments such as shops or real estate to keep their nest eggs growing, the Philippine growth rate of 6% and the low cost of living sweeten the offer.
The Philippines now leads the region in trying to woo this niche market, but it can expect neighboring countries with similar tropical living to compete.
Malaysia has a similar targeted program: Its retirement visas offer 10-year residency, and applicants must be over 50 and deposit $33,000. About 28,000 people have signed up so far, according to the Malaysian government. Thailand doesn’t have a dedicated program to try to attract retirees. However, under a long-stay program, it allows retirees 50 or older to stay on a one-year, renewable visa if they deposit about $22,000 in a Thai bank or show they receive at least $1,800 monthly. (Officials didn’t answer an inquiry about how many foreign retirees are in the country.)
In addition to more rivals eventually vying for the niche market, the Philippine pitch is also threatened by the country’s threadbare infrastructure and poor Internet connectivity, said Christian de Guzman, a senior analyst at Moody’s.
“Most of my friends have moved to Hainan, but property there is extremely expensive,” said Ding Bin, a retired CityPlace resident, referring to China’s southernmost province.
Mr. Ding and his wife, who moved from China’s chilly northeast, can live comfortably in the Philippines on $20,000 a year, he said, while enjoying year-round warmth, brushing up their English and exploring affordable investment opportunities.
He and other retirees have so far deposited $480 million in local bank accounts, a figure Philippine authorities expect to multiply in the next few years.
The government’s push has prompted real-estate companies to build developments from Manila to the powdery beaches of Cebu with foreign retirees specifically in mind.
Around 300 of 720 condos at Mactan Newtown, a new Megaworld development in Cebu that opened in November, were bought by Japanese retirees, who will eventually occupy 600 of the finished development’s 1,700 homes, the firm anticipates.
Rival developments in Cebu are springing up fast.
Robinsons Land Corp. , the property arm of JG Summit Holdings, another big Philippine conglomerate, and Syntech Properties Inc., a local subsidiary of Singaporean developer Woh Hup Group, are among those with existing condo developments targeting retirees in Cebu, and at least five more are being built here.
When completed, Mactan Newtown will have Japanese flavors like a Zen rock garden, plus easy access to the beach, golf course and Mactan-Cebu airport, which is a four-hour direct flight to Japan. Several Japanese destinations are available.
“The Philippines has warm, tropical weather all year round, and I think the cost of living here is as little as a 10th of what it would be in Japan,” said one of Mactan Newtown’s new Japanese residents, a 55-year-old former businessman who said he and his wife decided to move abroad after 2011’s Fukushima nuclear accident.
But it was the Philippines’ economic potential that won them over. “Future growth is almost certain,” he said.‘