Construction in Philippines - Key Trends and Opportunities to 2024

Construction in Philippines - Key Trends and Opportunities to 2024

Summary

The Philippine construction industry has been severely affected by the disruptions caused by the COVID-19 pandemic. The industry had been the fastest growing in Asia-Pacific before the pandemic, growing by 8.9% in real terms in 2019, following growth of 14.9% in the previous year. However, the industry is now expected to shrink by 23% in 2020, due to the impact of containment measures on the progress of construction projects across several parts of the country. According to the Philippine Statistics Authority (PSA), the industry’s value-add in real terms fell by 39.8% year on year (YoY) in Q3, and 30.4% YoY in Q2 2020.

In the short term, the industry is expected to continue to be affected by the disruptions caused by the varying levels of restrictions on activity. 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 offset the economic damage caused by the pandemic. Construction activities are also expected to be affected by the weak outlook for economic growth, coupled with the staggered relaxation of quarantine regulations across various parts of the country, and the temporary halt in construction activities (in late October) in the 17 local government units which comprise the National Capital Region (NCR), owing to Typhoon Goni.

The industry will recover, however, posting an average annual growth of 11.8% between 2021-2024, supported by investments in infrastructure, healthcare, education, and renewable energy projects. In mid-October 2020, the House of Representatives approved the PHP4.5 trillion (US$86.4 billion) national budget for 2021, which is equivalent to 21.8% of GDP, and is 9.9% higher than last year’s budget of PHP4.1 trillion (US$79.2 billion). The Fiscal Year (FY) 2021 budget will focus on improving the country’s healthcare system and increasing investments on public and digital infrastructure. There will also be support coming from the expected passage of the proposed Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) by the end of 2020, which will reduce the corporate income tax from 30% to 25%, and is expected to attract more foreign investment.

GlobalData’s Construction in the Philippines - Key Trends and Opportunities to 2024 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 construction activity
• Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Philippine construction industry
• Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Scope

This report provides a comprehensive analysis of the construction industry in the Philippines. It provides -

• Historical (2015-2019) and forecast (2020-2024) valuations of the construction industry in the Philippines, featuring details of key growth drivers.
• Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
• Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
• Listings of major projects, in addition to details of leading contractors and consultants

Reasons to Buy

• Identify and evaluate market opportunities using GlobalData'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 strategy using GlobalData's critical and actionable insight.
• Assess business risks, including cost, regulatory and competitive pressures.
• Evaluate competitive risk and success factors.