EVEN with the inflation rate reaching a year high of 6.4 percent, the total number of approved construction permits still registered an increase year-on-year (YoY) for the second quarter (Q2) of 2018, with most of the growth coming from the housing sector.
Citing the Philippine Statistic Authority’s (PSA) latest report on this, Pronove Tai International Property Consultants CEO Monique Pronove said that the number of permits in constructing residential buildings reached 29,060 or 72 percent of the overall 40,182 approved construction projects in Q2 of this year.
Except for duplex/quadruplex and other types of dwellings, the following grew in terms of share: apartment/accessoria (53.5 percent), residential condominiums (40 percent) and single-type houses (4.1 percent).
Housing constructions, valued at P57 billion, increased by 59.7 percent, from the P35.7 billion YoY. They accounted for over half of the total value of constructions estimated at P101.2 billion in Q2 2018.
“Filipinos already planned and started buying construction materials during the first quarter upon implementation of TRAIN [Tax Reform for Acceleration and Inclusion] law package,” she said.
This led to 8-percent hike YoY in the number of construction for residential buildings amid the 12-percent increase in construction cost per square meter, which, based on the report, is the direct impact of rising inflation from April to June 2018. Comparatively, the present average construction cost is at P11,314 per sq m.
“Infrastructure developments
spearheaded by the government plan to build more roads, bridges, railways and airports. This also led to the interest to improve residential dwellings,” she added.
According to her, developers are beginning to position housing projects not only in the National Capital Region but also in other developing areas, such as Region 4A (Calabarzon), accounting for 24 percent; Region 3, 13 percent; and Region 7 (Central Visayas), 11 percent.
The provinces of Pampanga (Clark), Bulacan (San Jose del Monte), Laguna (Biñan) and Cebu are seeing the rise of construction activities, she pointed out.
Meanwhile, residential units for sale or lease in Metro Manila are highly in-demand for foreign retirees, as well as buyers who want to settle in condominium developments, the top executive said.
Nonresidential constructions, on the other hand, rose to 5,644 projects, up 16.1 percent from 4,861 projects posted between April and June of 2017.
This resulted from the double-digit increase in number of constructions of agricultural buildings, with 349 (57.2 percent); institutional buildings, with 1,221 (35.1 percent); industrial buildings, with 624 (10.6 percent); and commercial buildings, with 3,329 (10 percent).
New or upcoming structures surged to 1,511 projects from 1,208 YoY, or an increase of 25.1 percent. Meanwhile, combined number of alterations and repairs of existing structures grew by 28.5 percent to 3,967, from 3,087 recorded in the two periods in review.
Despite the continued rise in prices of goods in the country, Pronove expects the volume of approved construction permits to slow down in the second half (H2) of this year, not primarily because of high inflation but due to the normal trend.
“Since 2014, the H2 performance normally decreases in the number of approved permits by an average of 4 percent,” she cited, while attributing the decline to the typhoon season, start of school year and the “ghost month” of August.
“However, it is expected to bounce back during the last quarter of the year with more applications coming in due to the planned construction normally scheduled at the start of the following year,” the CEO said.
The construction industry, in the long run, is seen to continue to expand due to public infra-projects that are currently starting to kick off.
“Moreover, the rehabilitation programs in Marawi City, as well as increasing township developments in Central Luzon and the Davao area, will enhance the construction activity for H2 2018,” Pronove stressed.