Construction in the Philippines - Key Trends and Opportunities to 2024
The Philippine construction industry has been severely affected by the disruption caused by the COVID-19 pandemic. GlobalData predicts that the industry's output will shrink by 9.2% in 2020, which reflects the sharp year-on-year drop of 33.5% in Q2 2020, when construction activity was brought to a standstill across many parts of the country, owing to the impact of COVID-19 containment measures. The construction industry in the Philippines had been growing at a fast pace prior to the COVID-19 crisis. It grew by 8.9% in real terms in 2019, following growth of 14.9% in the previous year. Although the overall spending on infrastructure remained strong in 2019, a delay in approval of the 2019 budget and the 45-day ban on public works had an impact on the country's investment on infrastructure in the first half of the year.
In the short term, the industry is expected to continue to be affected by the disruptions caused by the containment measures. Investment in new construction projects will also be limited by the re-allocation of government resources to address the current crisis; in June 2020, the Department of Budget and Management (DBM) reduced the infrastructure spending target for 2020 by 15.8%, from PHP989 billion (US$18.7 billion) to PHP833 billion (US$15.7 billion), due to funding re-alignment to tackle the pandemic. Although this year's spending target is reduced, the government plans to increase allocation for infrastructure in 2021, as it ramps up it plans to increase its spending on infrastructure.
In late July 2020, the country's president Rodrigo Duterte approved the proposed PHP4.5 trillion (US$85 billion) national budget for the fiscal year (FY) 2021, which is equivalent to 21.8% of GDP, and 9.9% higher than the FY2020 budget of PHP4.1 trillion (US$77.4 billion). The FY2021 budget will focus on improving the country's healthcare system, and increasing investments on public and digital infrastructure. The budget is expected to allocate PHP1.1 trillion (US$20.8 billion) for public infrastructure next year, equivalent to 5.3% of GDP. This is expected to support the completion of a number of major flagship projects under the Build, Build, Build (BBB) program over the next two years. Reflecting the disruptions caused by the pandemic, coupled with the weak outlook for economic growth, GlobalData forecasts the construction industry to shrink by 9.2% in 2020. The industry will recover, however, posting an average annual growth of 8.3% between 2021-2024, supported by investments in infrastructure, healthcare, education and renewable energy projects
This report provides detailed market analysis, information and insights into the Philippine construction industry, including -
This report provides a comprehensive analysis of the construction industry in the Philippines. It provides -