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Construction spending growth seen slowing due to election ban, budget

construction spending growth seen slowing due to election ban budget - Construction spending growth seen slowing due to election ban, budget
Building construction - Construction spending growth seen slowing due to election ban, budget
BW FILE PHOTO

THE Department of Trade and Industry (DTI) expects growth in the “low teens” for the construction sector this year, slower than the nearly 16% posted in 2018, due to the election ban on public infrastructure projects and the delayed 2019 budget.

Asked last week about a possible slowdown in construction spending this year, Trade Secretary Ramon M. Lopez said in a mobile message: “Less than quarter of year impact if we consider budget impasse in quarter 1 of this year that affected the BBB (Build, Build, Build) projects, as well as other local infra projects affected by election ban,” Mr. Lopez said.

“[C]onsidering almost 16% growth last year, we still can hit double digits, low-teens growth,” he added.

According to the Philippine Statistics Authority, construction spending in 2018 totaled P625.23 billion, up 15.9%, accelerating from 5.3% in 2017.

Barry G. Paulino, Philippine Contractors Association executive director, also said that the recently resolved 2019 budget standoff and the election ban on public works will “certainly” affect the sector but he expects a recovery after the May elections.

“We expect the growth to continue,” Mr. Paulino told BusinessWorld in an earlier interview, adding the construction projects initiated by the private sector will still drive much of the sector’s spending for this year.

Under the recently launched 10-year road map, industry spending is projected to hit P130 trillion by 2030.

The road map, if implemented, also estimates that the construction work force will grow 82.05% to 7.1 million workers from the 3.9 million in 2019.

Among the recommendations of the road map is legislating a long-term infrastructure plan to continue ongoing projects even when governments turn over every six years.

Construction industry stakeholders said they will submit within the year a formal proposal for lawmakers to look into the possibility of legislating a 30-year infrastructure master plan.

The road map proposed that a National Infrastructure Masterplan be allocated a minimum budget equivalent to 5% of GDP and other initiatives to determine appropriate financing modes for public infrastructure projects.

Asked when the proposal will be submitted to Congress, Liberito V. Espiritu, a member of the Domestic Construction Board, one of the implementing bodies of the Trade Department’s Construction Industry Authority of the Philippines, said it will be done within the year.

“We are hoping for legislation in which a certain percentage of the projects in the Philippines will be allocated for the industry,” Mr. Espiritu told BusinessWorld on the sidelines of the road map’s official launching event.

Mr. Lopez said ideally, the 30-year master plan will build on the “Build, Build, Build” program.

“We have to start preparing for the legislation for the infrastructure program. That is very important to ensure the implementation… to continue the aggressive momentum [of the country’s infrastructure growth],” he told BusinessWorld earlier at the road map launch. — Janina C. Lim

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