Construction works seen to rise further

MANILA, Philippines - The value of new Philippine construction projects are seen to rise 46 percent next year compared to this year, amid higher government spending for infrastructure as well as expectations of sustained strong economic growth, consultancy firm BCI Asia said.

In its Philippine Construction Market Outlook Report 2014 presented yesterday, BCI said the value of total construction starts in the country is seen to reach P937.593 billion in 2014, higher than the projected P643.466 billion this year.

“The growth in the Philippines is seen on the back of growth in OFW (overseas Filipino workers) remittances, BPO (business process outsourcing) and increased government spending on infrastructure,” BCI country manager Dean Borg said during the presentation of the report.

He noted that the construction sector’s growth next year would be driven by the expansion in the civil sector.

The value of civil construction starts, which covers initiatives spearheaded by the government, is expected to reach P432.871 billion next year, 61 percent higher than the estimated P268.827 billion this year.

Borg said a big portion of the growth next year could be seen in the second quarter as construction starts hit a peak.

“The government’s continued efforts in improving infrastructure, transportation and other systems in the country will ensure steady if not robust growth in this sector,” he said.

The value of building construction starts covering projects in the residential, industrial, and retail and commercial sectors, meanwhile, is seen to climb 35 percent to P504.722 billion next year from the estimated P374.639 billion this year.

Borg said the abandonment rate for projects in the country has settled at 2.8 percent during the third quarter of this year, while deferral rates are at 10.7 percent.

The low abandonment rate, which is an indication of the strength of the construction industry in the past quarter, is seen to remain steady.

“That deferrals are significantly more common than abandonments speaks well of the current market, in line with a stable economy that is still expected to grow by six to seven percent on average in the coming periods,” he said.

By area, he said the National Capital Region (NCR) is expected to maintain its position as leader in terms of construction start values next year.

The NCR is seen to produce a total of almost P381 billion worth of projects next year.

Other regions expected to account for a big share in construction starts next year are Central Visayas and Western Visayas with more than P161 billion and P132 billion worth of projects respectively, foreseen in 2014.