palao market.JPG

Nowadays when students come to me for advice on their feasibility studies, or sometimes a thesis, I gladly go out of my way to help.

These are course requirements to graduate on their architecture degree, and launch them on a lifetime career they chose.

Meeting them, and seeing their innocent eyes, I saw the naivete, the innocence, and lack of self-confidence, I experienced when I am at that age!

Later their naivete may turn into an egotistical sophistication, innocence into the battered demeanor of a seasoned warrior, and lack of self-confidence into a raging bull in a china shop. 

But that’s looking too much into the future. Who can tell what will happen to them? I do not have a crystal ball to see into their future.

So I have to help!

I hope to be one of those who mentored them along the way. I have this aching urge to share what I know at this point in my life!


Recently, two architecture students from Cagayan De Oro City came to me for advice.

One wants to have an FS for a drug rehab center, and the other one for a Bus and Jeepney Terminal.

Frankly, I know little to almost nothing about the drug rehab center! But I do know a little about bus terminals – as I incidentally managed the construction of one worth P 200 M many years ago!

Plus, I know how to prepare a feasibility study. That is a must for a Real Estate consultant to pass the board exam.

And yes, the principles are the same … be it a drug rehab center, a bus terminal, or any other endeavor.

So I gladly gave a mini crash course on FS making this morning:

on how to conduct a market study, financial, and economic analysis using excel.

on how to compare benefits and costs, payback period, net present value, internal rate of return, and sensitivity analysis.

I also advised them to use a Kepner Trego style site selection analysis – to make their FS unique and a little more than what is expected for an undergrad FS.  Hopefully, this will earn them additional credit. 


But I think the best advice I gave is on how to finish the FS at the shortest time, and with minimal data.

They have no more time to gather data, does not yet know how to make an FS, not well trained in financial and economic analysis, and sadly not familiar with excel.

So it’s magic time!


Yes, they have a lot of things to overcome – but they will hurdle this small FS assignment. 

Reason? They are young, and their dream is like a star that beckons like a magnet in the sky.

They will graduate next year, pass the board exams, and then become future Architects – and I have somehow helped them a little today.

How will they ultimately be as architects will depend on how they study further … as life is a neverending classroom of new ideas. 


” Via Ingredere Tuapte”  (Follow your own path)



Image result for cartoon + thinking man

” Where do I begin
To tell the story of how great a love can be

The sweet love story that is older than the sea
The simple truth about the love she brings to me
Where do I start?”

Just as in the song, I also do not know how to begin, or even how to start my masterpiece blog!

You see, I was interested in having a webpage of my own. And to accomplish my evil designs ( wink, wink!), I used the WordPress as an experimental web page – while I am trying to sharpen my spurs, and learn this mysterious world of the web.

I started this webpage in December of 2010 (about 7 years ago), but in all honesty have not been really serious with it.

Is it now time, to hit that restart button, once again?


As I sat in front of the white screen, a blank wall faces me. I immediately hit a solid wall right smack into my intellectual face, so to speak.

What shall I write?

What shall I share?

To whom shall I share my thoughts?

I feel the white lady peering over my shoulders with her disapproving, stern-faced look. And I am afraid to let my superb (wink, wink!) writing abilities show, and drain out my intellectual juices, lest it does not measure up to her expectations. This is a serious roadblock indeed!

I am writing for an imaginary unknown and craving for her imaginary approval.

Simply put, this is stifling my style, a lot!

How will then I kiss this old white lady … bye bye? I cannot just blow her out my mind. She was always there watching over me. But like any self-respecting blogger kuno, like a bird of prey (ala Aves De Rapina of T. Kalaw and company fame, eherm…) I must be free to soar out into the beyond, to the unknown, and conquer my imaginary fear.

This then is what I have to do! Definitely!

In order to get rid of that old white lady, henceforth I resolve to write for myself and myself alone, and share whatever I like to no one but myself! Yes, sir!

I will not be shackled by a craving for acceptance in my art. I will be like “Invictus”. Yup, the new me (wink, wink!).

” Invictus

Out of the night that covers me,
Black as the Pit from pole to pole,
I thank whatever gods may be
For my unconquerable soul.

In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody but unbowed.

Beyond this place of wrath and tears
Looms but the Horror of the shade,
And yet the menace of the years
Finds, and shall find, me unafraid.

It matters not how strait the gate,
How charged with punishments the scroll.
I am the master of my fate:
I am the captain of my soul.

William Ernest Henley

I do not need that old imaginary hag to stifle me, do I?

A good start?


That’s the Way It Is!

by: Merlito Castor Catolico, Real Estate Consultant (PRC Lic. No. 062)

A food for thought for former friends and acquaintances (who are now foreign nationals) who are planning to buy a property in the Philippines:

1. The Listing Broker is not your “friend” – His loyalty is with the owner of the house he is selling and not to you!

In fact, he has a contract with the owner to sell the property (called a listing agreement signed by both parties) at the highest price possible because often his professional fee is a % of the gross sales, and worst (particularly for unlicensed “brokers” kuno) he might just simply jack up the prices – and in some hilarious situation ends up getting a higher amount than the owner himself!

2. If you spend millions of pesos to buy a property – common sense tells you to have it properly appraised by a professional real estate appraiser to estimate its market value.

Do not rely on the broker himself (see No. 1 above), the neighborhood gossip, a relative with no real estate experience regardless of how good and pure his intention is, a former office mate you have not seen in the last decade.

Spending say P 20,000 for an appraisal of a P 5,000,000 3 bedroom residential property means investing 0.4% for your peace of mind! Its hard to lie down in your new bedroom looking at the ceiling for the next 10 years knowing that at your age – you were still duped by a glib talker!

3. Common sense will also tell you to have the property be thoroughly “property inspected” for termites, obsolete designs, external obsolescence (present and future – a garbage dump maybe proposed near your backyard by the city hall, or somebody died of a horribly infectious decease in the masters bedroom, God forbid!).

Hire somebody to climb the attic, ceiling, and crawl underneath, and look under the kitchen sink – and not just to leisurely take a walk around the property!

4. A background investigation title or ownership due diligence is also necessary. The property might be in the middle of nasty property dispute – and the back page is littered with a lot of lis pendens, mortgages, etc. The seller might not be the true owner, or his title might be spurious, a duplication, a fake, with a cloud, etc.

The house might be inadvertently standing on another’s property! Have it also surveyed by a Geodetic Engineer to be sure – especially for rural areas whose physical boundaries might be just some rock or trees planted by an ancestor long ago!

5. If you are a former Filipino citizen who is already a citizen of another country, then you have lost the rights of a Filipino citizen, and you are barred from owning real estate in the Philippines, except under certain circumstances like inheritance, previously owned properties, and under the special conditions of BP 185 (Residential up to 1000 Sq. M. Urban, and up to 1 hectare Rural), and RA 8179 ( up to 5000 rural, and up to 3 hac Rural – for business) – just go to the internet an Google it up!

By the way, a foreigner can also buy condos provided the ownership of foreign nationals in the condo corporation does not exceed 40%.

There are a lot of things to consider when buying properties in the Philippines like the taxes to be paid, and the deadline for payment of those taxes (for Capital Gains tax, 60 days from notarization, for Documentary Stamps, the 5th day of the next month).

Also don’t forget to arrange who will process the registration of your new property – there are brokerage firms who does this for a fee.

But never deal with an unlicensed or colorum broker or agent. It is a violation of RA 9646 or the RESA law, and punishable with a fine of P 100,000 or 2 years imprisonment, or both; or even double that for illegal practitioners.

If as a buyer, and your dollar is so burning a hole in your pocket such that you are super anxious to spend it now regardless of the RESA law – just remember that knowing that your broker or agent is an illegal colorum yet you deal with him with this foreknowledge, makes you a complicit to the crime itself – and may bar you from complaining to the authorities in the future if the deal turns south!

What a bad idea to start your new life in the Philippines by violating a law!

if you don’t know this – then you do now. We are now in the information age and its very easy to unmask a fake or illegal broker or sales agent.

Just visit the PRC website to check and unmask the true identity of your broker or sales agent. Just google this and fill in the name of your broker: http://www.prc.gov.ph/services/?id=16

That’s the way it is!

Use the form below to search our records and confirm the identities of registered professionals. Search may be done on the name or the license number of the professional.

What Is Stripping?


As applied to real estate appraisal, stripping is not porn.

 Usually applied in mass appraisals, it is an application of the 4-3-2-1 rule. Simply stated, it means that the market value of a real estate is greatest as it is nearer the road, and reduces in market value as it is farther away from it.

 Mass appraisal is  “the process of valuing a group of properties as of a given date, using standard methods, employing common data, and allowing for statistical testing” (from Standard of Mass Appraisal of Real Property International Association of Assessing Officers). This is necessary for uniformity and consistency in ad valorem (Latin for “according to value” which means that we are taxed according to the value of our real and personal property) appraisals.

Wait a minute!

Are we also taxed for our personal property? Actually, yes, but it depends upon the laws your country!

Mass appraisals are usually used by assessors in computing our real property taxes. The trend nowadays is to computerize everything such as in the Computer Assisted Mass Appraisal (CAMA) and in the application of the multiple regression analysis to mass appraisal (but this is another topic for another blog!).

 But What Of The 4-3-2-1 Rule?

This is a rule of thumb akin to the depth adjustments made to determine the value of properties bordering on roads and highways. This rule states that the front quarter of a parcel is worth 40% of the whole value, the second quarter 30%, the third quarter 20%, and the rear quarter 10% (see Figure A).

By way of example, suppose that you have four thousand square meters property bordering a street where the market value is established at P 10,000 per square meter.


In real estate appraisal, the standard depth of a lot in the area is established first (for example in Iligan City it is 20 meters). Then the lot is stripped by the standard depth as shown in Figure B (the percentages is usually fixed by a city or municipal ordinance):


In the Philippines, the Department of Finance released a “Manual On Real Property Appraisal and Assessment Operations” on January 2006, and has the following rules on appraisal using the Stripping Method above:

 1. It is not to be used for commercial and industrial properties

2. It shall not apply to corner lots

3. For lands bounded by 2 streets that are not considered corner lots, the higher street value shall be applied, provided that the value per square meter for the last strip shall not be lower than the value per square meter of lots in the other street.

4. Subdivision lots are not subject to stripping

 Real estate appraisal by Assessors is something that we usually put in the back burner, until the beginning of the year when we are assessed and required to pay our real estate taxes.

 In the Philippines, a lot of cities and municipalities are now re-computing the real property tax in what is called the “general revision” based on Section 219 of RA 7160.

This will be applied in 2014!

 Then at that time perhaps, we shall be more interested in the stripping (our real estate)!

 PS: Next time we shall discuss about the 65/35 rule in valuing triangular lots.

The Game of Thrones

Source: cinema.com

The AIPO national directorate – especially the first batch in the election of 2012 – will in effect control the fate of the real estate industry for better or for worse – in the decades to come.

The AIPO will have the golden opportunity to change the image of the real estate industry – professionalize it, keep it up in this internet age, unite it into a single potent unit from a disaggregation of various splinter groups.

There is however also the so-called “dark side of the force”. On the  flip side, this power that could be undeniably used for good –  can be also used to run down or out of business perceive enemies, and use the power for personal gains and glory.This is both good and bad – as it is always in real life.

How ? This they can do through RA 9646.

Consider this facts:

  • The AIPO will have the power to determine the next batches of PRB RES. How? Under Section 4 of the RA 9646 IRR, the AIPO is the only one who will give a list of five candidates for every vacant PRB RES position – from which the President of the Philippines shall appoint a nominee to that vacancy (from out of three nominees by the PRC – also taken from the same list).
  • The nominees must come from the AIPO but is not an officer at the time of his appointment (Section 6.d of the IRR). Those wanting to be nominated to the PRB RES must therefore  join the AIPO but not aim for any officership position at all – in order to be qualified.
  • The PRB RES controls the conduct and direction of the real estate industry for years to come (See Section 5 of the IRR). For example, the board conducts licensure examination; issues and revokes/reinstates licenses of practitioners; adopts the national code of ethics issued by the AIPO; screens, issue and monitor the service providers for the CPE seminars, and a many other powers.

The AIPO then is very crucial. This power to indirectly influence the PRB RES, in the hands of an unscrupulous person or clique can be a boon or a bane to many. However, done properly, with a pure heart, and unselfish intention – this power can be used for the good of all. As in the Spiderman movie it is said, “ From great power comes great responsibilities”, but some would say also “weather – weather lang yan!” – and that is the fear of many.

This is now the moment of truth for many of us. We must select leaders who will work unselfishly for the industry, with no personal motive of self aggrandizement, and no axe to grind their enemies to the ground. Does this leader exist at all?

There are always two sides to a coin – black and white, night and day. Discerning RESPs however must be able to “see” these two sides, step up to the plate, and make the right decision when push comes to shove. They can vote with their hearts and discerning mind – and not as a mob, or a sheep to slaughter. In short, they must exercise due diligence, and vote according to their conscience on what would be best for everyone.

But how can we do this? We have no power to see the future, nor the ability to see the hearts and mind of men(and women). However, we can see the past, and this past can give us a clue into the capability and true character of a person.

Let us then exercise due diligence and select leaders with a golden heart  – the one who will unify us, guide us to greater possibilities in our profession, guided by  a refined sense of spirituality, of justice and impartiality. One who will truly galvanize us into action for the good of all. That is the least we can do.

Let the game of thrones begin.

Latest Count: Number of Real Estate Practitioners in the Philippines As of March 23,2012

In my previous Blog, I estimated that there are 15,437 Real Estate Service Practitioners (RESP) in the Philippines as of February 13, 2012. (To read this blog, please go to this URL). This of course, does not take into consideration the hundreds, if not thousands, of Salespersons who registered with the PRC to avail of the so called “Grandfather Clause” of the RA 9646, or the RESA Law.

The estimate enumerates the Professional  Regulation Commission (PRC) and Professional Regulatory Board of Real Estate Service (PRB RES) approved RESPs and also assumes that all of them has already applied with the PRC for licensing. In reality,  of course, some still may not have applied for a license at the PRC for whatever personal reasons.

Now once again, the “tribe” of RESPs has increased – with the addition of new Appraisers, Assessors and  Brokers.

First in the line, is the newly minted Resolution No. 05 Series of 2012 dated Feb 29, 2012 with the new Appraisers totaling  408 in all.  Second, just very recently on March 8, 2012,  PRC and PRB RES again approved the new crop of RESPs as follows: Resolution No. 06 Series of 2012 for 181 Real Estate Brokers, and then followed by Resolution No. 07 Series of 2012 for 12  new Appraisers/ Assessors.

So what’s the updated tally?

Real Estate Consultants (REC) are still 69 nationwide (that magic number, lol!), while Real Estate Appraisers (REA) is now 3,160, and the Real Estate Brokers (REB) is steadily rising at 12,809.

The total number of RESP in the Philippines now (as of March 23, 2012) – and at any moment the result of the exam for Real Estate Brokers last week will be released by the way – is 16,038 more or less, (or in terms of percentages, the Consultants is still less than 1% at 0.43%, the REAs at 19 %, and the REBs, which naturally forms the overwhelming majority is at 80.57%).

Side comments:

Some Real Estate Brokers likes to christen their Salespersons on their firms as ” Real Property Consultants” or something to that effect. I humbly suggest that it will be confusing to the public, and is a misrepresentation of our RE Consultants, as well as it would cheapen the stature of the Real Estate Consultants in our industry. The Real Estate Consultant in the Philippines by the way – in order to qualify for the 2 days examination (including a revalida of a previously submitted Feasibilty Study) –  must have notched at least a solid 10 years experience as a broker, or 5 years experience as an Appraiser.

Obviously, this needs a vast knowledge and skill in all fields of realty service, real estate finance, law, mathematics, and economics – to say the least (by the way, a revalida is an oral, face to face, defense of your feasibility study in front of the Board, or PRB RES – which scrutinizes your market, technical, financial and other aspects of your feasibility study).

(P.S.: Our group the Center for Real Estate Education Knowledge and Skills, Inc. based in Cagayan De Oro City is planning to offer a review for REC this year. We are in the process of organizing the review and getting the necessary permits from the PRC and PRB RES. The CREEKS, Inc. boasts an array of experienced brokers, real estate appraisers, real estate consultants, CPA, lawyers, engineers, environmental planners – which we can even augment more as may be necessary – thus ensuring a rich and truly challenging review for the aspirants.

We also have our board exam top notchers within the teaching staff with us – for REC No. 1,2 and 3 in the Board Exam ; for REA within the top ten; and for REBs No. 1.

For those interested to review with us, please contact us this early for your reservation – as we will be definitely limiting the slot of reviewees to a manageable number.)

The service of the RECs in the Philippines is very different from that of a Broker or Salesperson,  or even Appraiser / Valuer as it involves consultancy services in feasibility studies, HABU analysis, distressed property consulting, market analysis, development planning, and other such things – which is far from selling properties.

To name our Salespersons as “Real Property Consultants” even just as a marketing ploy is in my opinion not advisable.

To the new Appraisers, Assessors, and Real Estate Brokers, cheers!

Good luck!