Quo Vadis—Ayala Alabang Village Land Values

Published October 9, 2019

Ayala Alabang Village (AAV) has always been known as a Southern sanctuary where kids talk with American twangs and have laid-back lifestyles. It has the best features gated communities have to offer: tight security, a golf course, a polo field, prestigious schools, wide roads, and other amenities. It’s home for many of the country’s celebrities, politicians, and top executives. Despite having all these, lot prices in AAV have lagged the run-up of property prices of other prominent villages in Makati and Pasig. Will AAV prices ever catch up?

Figure 1

History of Ayala Alabang Village

After successfully developing Makati in the 60s, the Ayala Family sought to venture into developing other parcels of land. They chose to enter into a joint venture with the Madrigals to develop the latter’s 661-hectare mango farm in Muntinlupa. They developed the property into a residential-commercial district, which today is known as areas comprising Ayala Alabang Village, Alabang Town Center, and Madrigal Business Park.

To help drive demand for the village, the Ayalas donated lands to De La Salle Zobel[1] in 1978 and Parents for Education Foundation (PAREF)[2] in 1981 as well as developed a golf course and country club. Demand for the lots was strong, and inventory was sold out as soon as the developer opened new phases.

In the early 90s, the Ayalas tried to expand the village boundaries by bidding for the government’s 244-hectare Alabang Stock Farm, which was adjacent to AAV. Unfortunately, the Gotianuns outbid the Ayalas for the property.[3] This parcel of land was transformed to what is now known as Filinvest City.

Why prices have lagged

A close look at the data would suggest that the top performing villages are found beside Central Business Districts (CBDs), particularly Makati/BGC and Ortigas/Manda/Pasig CBDs. The bigger the CBDs, the more expensive adjacent villages are. Data from Lee Chiu shows that Makati and BGC CBDs have a combined 5.72 Mn square meters of office space, while Ortigas/Manda/Pasig CBDs have a total of 2.26 Mn square meters. Alabang only has 707,000 square meters. It seems that Filinvest have taken a conservative stance in developing Filinvest City the past 2 and a half decades. 

Figure 2

The New Bilibid Prison––Catalyst for AAV Price Escalation

Unknown to some, the 367-hectare New Bilibid Prison (NBP), the penitentiary housing the country’s most notorious convicts is a stone’s throw away from AAV (1.3 kilometers to be exact). Transferring NBP is not a question of “if” but “when”. Plans to transfer the facility to another location had been brought up by politicians as far back as early 2000s[4].

In fact, the past two administrations had drawn plans for its transfer with the Arroyo Administration issuing Executive Orders to transfer the facility to Tanay, Rizal[5] and the Aquino Administration offering it as a Public-Private Partnership project that would have cost Php50.2 Bn.[6] Unfortunately, nothing transpired. When Duterte became President, he planned to create a Php150 Bn penitentiary facility in Nueva Ecija[7], but later withdrew plans mainly due to prioritization of other issues[8]. Nonetheless, we saw some movement in the area with (former) BuCor Chief Nicanor Faeldon ordering in March of 2019 the cutting of water and electricity supplies of the informal settlers living around the NBP to force them out.[9]

The NBP will be privatized and be put up for bidding amongst the country’s largest developers capable of raising the required capital. I’m expecting Ayala Land, Vista Land, Megaworld, and SM to be at the forefront of the auction.

It will happen in the next 3 years due to three factors

  1. Congestion

As of August 2019, NBP reported that a total of 27,165 inmates are held in a facility designed for only 6,435 inmates—an over occupancy rate of 422%.[10] In fact, reports from the Institute For Criminal Policy Research (London) show that the Philippines’ has the second most crowded prison in the world. The lack of proper ventilation from overcrowding makes it hard to contain the spread of diseases, and in fact cause the death of approximately 5,200 inmates annually.[11] Despite the high mortality, the inmate population increases by an average of 4.3% annually. [12]

Figure 3

The over congestion of the NBP has also caused a lot of other problems: Antonio Leviste’s escape in 2011[13]; the proliferation of contraband items[14]; and more recently the “ninja-cops” issue in 2019[15]. The congestion helps disguise symptoms of these problems. Reports from the NBP show that guards to inmate ratio has ballooned to 1 guard for every 54 inmates––a lot more than the 1:9 ratio in 1990. [16] Moreover, senators have highlighted how primitive the facility is and how a state-of-the-art facility would help minimize these problems.[17]

  1. Operating Costs

Between December 2018 and August 2019, the government’s appropriation to Bureau of Corrections has ballooned by 54%.[18] This is mainly attributed to the jurassic systems of the NBP, where more inmates simply mean the need for more guards for security. Having a more state-of-the-art facility such as buttons can open/close cells, CCTV coverage, cellphone signal jammers and biometric systems would lessen the need human intervention—and therefore reduce operating costs and even corruption within the facility.

  1. Good timing with the general rise of property prices

Since the time of the last two previous administrations, real estate prices have increased significantly. From the time the Manila-Cavite Expressway (MCX) opened in 2014 to today, prices in NBP’s area has more than doubled[19]. Prior to the completion of the MCX in 2014, the zonal value of Katarungan Village, which used to be a portion of the NBP but was given to employees of the Department of Justice[20]) was at Php8,000 per square meter. Had the government sold the property at the time, they would have raised Php29.36 Bn, which would not have been enough to fund the cost of relocating the property and putting up a new facility (and thus the need for the private proponent for funding). Today, however, Katarungan Village zonal values have risen to Php22,000/sqm, which will allow the government to sell this land for AT LEAST Php22,000/sqm, or equivalently Php80.74 Bn enough for a new facility elsewhere.

Ayalas to develop the Next CBD

The Ayalas are likely to outbid everyone since they are the best in unlocking property values. When the FTI complex was auctioned in 2012, the Ayalas bid Php24.3 Bn (Php32,838/sqm)—138% higher than the floor price set by the government and 66% higher than the next closest bid. [21] Property analysts were dumbfounded why the Ayalas bid that high. Six months later, Ayala sold 17 commercial lots in the complex at Php150,000/sqm without having started any construction.[22] More recently, Eton Properties teamed up with Ayala Land to develop and market Eton’s land in Pasig (Parklinks)[23], a clear testament to the Ayala’s prowess in unlocking property values. They’re the ones who were able to convince the old rich in Manila to transfer to Makati. Moreover, guess who the private proponent is for the MCX, the road adjacent to NBP: AC Infra, Ayala Corporation’s infrastructure subsidiary.[24] MCX is the first and only highway project of AC Infra to date. Control of MCX is essential for the development of NBP since the highway operator will ultimately decide where entry and exit points will be put.

Figure 3


Future plans for NBP will bolster prices of AAV, narrowing the gap from lot prices in Makati/Ortigas/Pasig villages. I would be the least bit surprised if prices in AAV and surrounding areas double within 6 months after an announcement that Ayala won the NBP bidding. The underperformance of prices in AAV actually provides a good timing for investors to buy in now.

Figure 4

Juan Alfredo S. Patag, REB
REB Lic.# 0023114; ID# 18-1612675 until 10/20/2022; PTR#7335646 until 12/31/2019
M: +63 917 520.5826
E: jpatag@remax.ph

RE/MAX Capital
5th Floor, Phinma Plaza, Plaza Drive, Rockwell Center, Makati City

DISCLAIMER: This material, which is strictly for information purposes only. The views and opinions expressed in this article are those of Juan Patag’s and do not necessarily reflect the position of RE/MAX Capital, or of any other RE/MAX franchise. Any information is subject to change without prior notice. No liability whatsoever is accepted for any loss that may arise (whether direct or consequential) from any use of the information contained herein. Information Each RE/MAX franchise is independently owned and operated.


[1] Wikipedia contributors. (2019, October 4). De La Salle Santiago Zobel School. In Wikipedia. Retrieved 03:42, October 9, 2019, from https://en.wikipedia.org/

[2] PAREF Woodrose (n.d.). History Woodrose. Retrieved from http://www.parefwoodrose.edu.ph

[3] H. Dick, P. Rimmer (2003). Cities, Transport and Communications, The Integration of Southeast Asia since 1850. New York, N.Y.: Palgrave Macmillan

[4] Ferriols, D. (2003, March 5). Only 70% of prison property to be sold. Retrieved from https://www.philstar.com

[5] Official Gazette (2006, September 8). Executive Order No. 568, s. 2006. Retrieved from https://www.officialgazette.gov.ph/

[6] Public Private Partnership Center (2016, August). New date set for prison PPP project bid submission. Retrieved from https://ppp.gov.ph

[7] Echeminada, P. (2016, October 12). NBP transfer to Nueva Ecija to push through – Aguirre. Retrieved from https://www.philstar.com

[8] Buan, L. (2017, September 3). Duterte might not push through with mega prison in Nueva Ecija – Aguirre. Retrieved from https://www.rappler.com

[9] Cabalza, D. (2019, March 27). Water, power cut to force 10,000 families off Bilibid land. Retrieved from https://newsinfo.inquirer.net/

[10] Bureau of Corrections (2019, September 20). Statistic on Prison Congestion. Retrieved from http://bucor.gov.ph/

[11] Yeung, J. (2019, October 4). More than 5,000 inmates die at this prison every year. Retrieved from https://edition.cnn.com/

[12] Bureau of Corrections (2019, September 16). PDL Profile Statistics 1990-2019. Retrieved from http://bucor.gov.ph/

[13] Official Gazette (2011, May 28). DOJ fact-finding panel report on Bureau of Corrections.  Retrieved from https://www.officialgazette.gov.ph

[14] Frialde, M. (2016, April 19). Bilibid surprise search yields contraband. Retrieved from https://www.philstar.com

[15] Ramos, M. (2019, October 9). Sotto urges PNP chief to fire ‘ninja cops’. Retrieved from https://newsinfo.inquirer.net

[16] Bureau of Corrections.

[17] GMA News (2019, September 13). Lacson calls for establishment of regional prison facilities. Retrieved from https://www.gmanetwork.com

[18] Bureau of Corrections (2019, September 16). PDL Profile Statistics 1990-2019. Retrieved from http://bucor.gov.ph/


[19] BIR Zonal Values

[20] Department of Justice (1991). Katarungan Village I. Retrieved from https://www.doj.gov.ph

[21] Rappler (2012, August 14). Ayala Land wins FTI with P24-B bid. Retrieved from https://www.rappler.com/business/10497-ayala-land-wins-fti-with-p24-b-bid

[22] Dumlao D. (2013, February 18). Ayala Land cashes in on FTI. Retrieved from https://business.inquirer.net

[23] Ayala Land (2018, January 18). Ayala Land & Eton Properties launch their greenest urban estate: Parklinks. Retrieved from https://www.ayalaland.com.ph

[24] AC Infra (n.d.). MCX Tollway, Inc. Retrieved from http://www.acinfra.com.ph


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