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Building approvals flat in 2019

building approvals flat in 2019 - Building approvals flat in 2019

CONSTRUCTION starts as measured by building permit approvals declined slightly in 2019, the Philippine Statistics Authority reported in its final estimates for the indicator.

Building approvals declined 0.02% in 2019 to 173,162. The retreat in the number of approvals reverses the 13.9% rise posted in 2018.

Approved projects involved 41.6 million square meters (sq.m.) of floor space, up 1.2%, valued at P491.8 billion, up 3.3%.

Permits for residential projects, which made up 71.8% of the total approved building permits last year, declined by 1.7% to 124,275. These projects were valued at P225.8 billion with a floor area of 20.01 million sq.m.

Single-detached homes accounted for 105,595 permits, followed by apartments at 14,501, duplexes and quadruplexes 3,784, condominiums 177, and other residential projects 218.

Non-residential project approvals rose 9.3% to 26,649, worth P233.2 billion and involving a floor area of 20.9 million sq.m.

Within the category were permits for 16,251 commercial buildings, 5,887 institutional buildings, 2,649 industrial buildings, 1,179 agricultural buildings, and 683 “other non-residential” buildings.

Permits for additions to existing structures numbered 6,166 in 2019, while those for alterations and repairs of existing structures numbered 16,072.

Region IV-A (CALABARZON) topped the regions with 42,762 in approved construction permits. Region VII (Central Visayas) and Region III (Central Luzon) followed with 19,828 and 18,965 permits, respectively.

By value, Metro Manila had projects amounting to P158.1 billion, followed by CALABARZON with P77.4 billion and Central Visayas P52.3 billion. Together, these three regions accounted for 58.5% of construction value last year.

“It seems counterintuitive given that in 2019, ‘Build, Build, Build’ was ongoing, reinforcing private construction,” Asian Institute of Management Economist John Paolo R. Rivera said in an e-mail, referring to the government’s infrastructure program.

“This decline (may be attributed) to… delays in executing contracts, supply chain constraints in sourcing construction materials both locally and internationally, logistical challenges, business disruptions, and a sign of deteriorating business and consumer sentiment not just in the country, but also in our neighboring countries and across the world,” he added.

The construction sector’s gross value added grew by 7.8% in 2019, exceeding the Philippines’ gross domestic product growth of six percent that year. The sector’s growth last year, however, was lower than the 14.3% posted in 2018.

Mr. Rivera expects “slow to moderate” recovery in construction statistics this year, but that this would depend on how soon the pandemic is contained.

“I do not see a quick recovery for construction because given the financial constraints, funds may be reallocated from construction/infrastructure spending to more immediate or pertinent concerns such as consumption, bail-out subsidies, or recovery expenditures,” Mr. Rivera said.

“However, the construction sector will certainly bounce back in 2021, if the Philippines can contain the pandemic and fully bootstrap the economy’s other sectors.” — Michelle Anne P. Soliman

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