Construction in the Philippines : Key Trends and Opportunities to 2018

Timetric
September 18, 2014
72 Pages - SKU: TMTR5329557
Countries covered: Philippines



Construction in the Philippines – Key Trends and Opportunities to 2018

Synopsis

This report provides detailed market analysis, information and insights into the Philippine construction industry including:
  • The Philippine construction industry's growth prospects by market, project type and type of construction activity
  • Analysis of equipment, material and service costs across each project type in the Philippines
  • Critical insight into the impact of industry trends and issues, and the risks and opportunities they present to participants in the Philippine construction industry
  • Analyzing the profiles of the leading operators in the Philippine construction industry.
  • Data highlights of the largest construction projects in the Philippines
Summary

The Philippine construction industry increased in value at a compound annual growth rate (CAGR) of 12.01% during the review period (2009-2013). This growth was supported by public investments in the infrastructure and residential markets, which are expected to be the main growth drivers over the forecast period (2014-2018). The industry is projected to record a forecast-period CAGR of 9.90%. Business process outsourcing, public-private partnership (PPP) initiatives and rise in the number of tourist arrivals will also drive industry expansion, leading to the construction of more residential properties, roads, bridges, offices and power plants.

Scope

This report provides a comprehensive analysis of the construction industry in the Philippines. It provides:
  • Historical (2009-2013) and forecast (2014-2018) valuations of the construction industry in Philippines using construction output and value-add methods
  • Segmentation by sector (commercial, industrial, infrastructure, institutional and residential) and by project type
  • Breakdown of values within each project type, by type of activity (new construction, repair and maintenance, refurbishment and demolition) and by type of cost (materials, equipment and services)
  • Analysis of key construction industry issues, including regulation, cost management, funding and pricing
  • Detailed profiles of the leading construction companies in Philippines
Reasons To Buy
  • Identify and evaluate market opportunities using Timetric's standardized valuation and forecasting methodologies
  • Assess market growth potential at a micro-level with over 600 time-series data forecasts
  • Understand the latest industry and market trends
  • Formulate and validate business strategies using Timetric's critical and actionable insight
  • Assess business risks, including cost, regulatory and competitive pressures
  • Evaluate competitive risk and success factors
Key Highlights
  • Construction value add in nominal terms registered a review-period CAGR of 10.18%. The construction value add is expected to register a CAGR of 10.63% over the forecast period, owing to the country’s robust economic conditions. The forecast-period outlook for construction in the country is more optimistic, with increased government spending, an increased proportion of construction expenditure in the country’s GDP, and the rise in the number of tourist arrivals.
  • The Philippine construction activity has been growing. According to the Philippine Statistics Authority (PSA), the number of approved building permits increased by 20.8%, from 24,400 new construction projects in the first quarter of 2013 to 29,468 in the first quarter of 2014. Moreover, residential-type building projects recorded a faster rate of expansion, with 17.1%, compared with non-residential buildings with 15.2%. While the rise in activity indicates improvements in the industry, there are concerns over the impact this will have on material and labor prices.
  • In a bid to revive the country’s housing market and meet demand from the growing population, the Housing and Land Use Regulatory Board (HLURB) has set a target to construct 1 million housing units by 2016, and also announced the construction of 301 condominium projects in Metro Manila, constituting 134,421 housing units over 2013–2017. Of the total, the mid-market segment consisted of 49,997 units (37.0%), while one-bedroom housing units accounted for 104,028 units (77.0%). Residential sales are stronger among the high-end market and foreigners, as they are more prone to leasing and renting property. This will support residential construction activity in the country over the forecast period.
  • The central region of the Philippines was struck by Typhoon Rammasun in July 2014, with Manila being the worst affected city. The typhoon inflicted damage to infrastructure and also caused a power blackout. Consequently, reconstruction works are expected to support infrastructure construction over the forecast period based on excess demand for construction activities in the country.
  • The Philippines invested heavily in infrastructure projects during the review period, with this anticipated to continue over the forecast period. In October 2012, the Philippines Department of Public Works and Highways (DPWH) announced plans to launch several infrastructure projects over the forecast period, amounting to PHP239.1 billion (US$5.5 billion). This will include the construction of PPP projects such as the 7.15km-long Ninoy Aquino International Airport Expressway, the C-6 Expressway and Global Link, the 13.4km North Luzon Expressway-South Luzon Expressway (NLEx-SLEx), the Connector-Elevated Expressway and Metro Manila Skyway Stage-3, the 36.0km-long Cavite-Laguna Expressway, the Kennon Road and Marcos Highway improvement, and the second phase of the Southern Tagalog Arterial Road. It also aims to construct new bridges, upgrade unpaved roads, and upgrade expressways and highways. The major project will be a 10-year contract for the operation and maintenance of Manila’s electric train systems, which will amount to PHP14.1 billion (US$325.0 million).


Additional Information

EXECUTIVE SUMMARY

The Philippine construction industry increased in value at a compound annual growth rate (CAGR) of XX.XX% during the review period (2009-2013), to reach PHPXX.XX trillion (US$XX.XX billion) in 2013. This growth was supported by public investments in the infrastructure and residential markets, which are expected to be the main growth drivers over the forecast period (2014-2018). The industry is projected to record a forecast-period CAGR of XX.XX% and value PHPXX.XX trillion (US$XX.XX billion) by 2018. Business process outsourcing, public-private partnership (PPP) initiatives and rise in the number of tourist arrivals will also drive industry expansion, leading to the construction of more residential properties, roads, bridges, offices and power plants.

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