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Philippines: Construction spending declines during pandemic
MANILA, Philippines — The construction sector suffered a decline of about 44 percent to P276 billion last year as plans to put up new buildings and expand existing structures were held off by the lockdown.
Based on records from the Philippine Statistics Authority (PSA), construction spending sank from P491.8 billion in 2019 due to double-digit drops in every category of the sector.
During the period, building permits issued totaled 123,783 covering 24.98 million square meters of construction work, shrinking from the prior year’s 173,162 permits spanning 41.58 million sqm.
Residential construction, accounting for nearly half of expenditures, fell by almost 30 percent to P131.08 billion. A total of 87,419 building permits were secured to put up 12.4 million sqm of household units, according to the PSA.
On the other hand, non-residential projects crashed by more than 46 percent to P124.96 billion. For the segment, construction firms obtained 19,407 building permits and contracted 12.28 million sqm of floor area.
Spending for alterations and repairs decreased by close to 38 percent to P16.76 billion, while expansions plunged by roughly 49 percent to P2.99 billion.
In terms of value, Metro Manila comprised over 27 percent of expenditures at P76.29 billion, ahead of Southern Tagalog’s P44.58 billion and Central Luzon’s P31.09 billion.
However, Southern Tagalog took nearly 20 percent of the construction projects at 24,411, while Central Visayas and Ilocos Region came in next with 18,328 and 12,932, respectively.
Single houses, built to shelter just one family, accounted for more than 62 percent of residential spending at P81.7 billion. Commercial structures, raised for business functions, registered over 43 percent of non-residential expenditure at P53.9 billion to lead the bracket.
Last year Filipinos spent an average P10,348 per sqm from P11,141/sqm in 2019. Residential construction recorded the highest rate at P10,570/sqm, especially condominium units that priced P14,639/sqm.
In a separate report, the PSA reported that construction spending tripled to P84.35 billion in the second quarter, from P28.66 billion a year ago, an indication the sector may be recovering on the resumption of economic activities in 2021.
During the period, the government approved 38,389 building permits covering 7.14 million sqm of floor area, jumping from the year ago’s total of 17,932 involving 2.87 million sqm.
Source: https://www.philstar.com/business/2021/09/15/2127135/construction-spending-declines-during-pandemic