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Construction industry seen sustaining growth

The construction industry is forecast to sustain its strength underpinned by the growth of the economy and the push for infrastructure.

The construction industry is forecast to sustain its strength underpinned by the growth of the economy and the push for infrastructure.

BMI Research has maintained its forecast that the Philippines’ construction industry will grow by 12.5 percent in real terms in 2017 and 11.8 percent in 2018, supported by the government’s ambitious infrastructure development plans.

The nominal value of the country’s construction industry will nearly double in value by 2022.

“President Duterte’s P8 trillion ‘build, build, build’ infrastructure plan will generate significant volumes of construction activity through and beyond 2022, the end of his term,” BMI said.

“Although many of the projects were previously proposed, the current government’s willingness to use alternative financing modes such as hybrid PPPs (public-private partnerships) and development finance could help projects come to fruition more quickly,” it added.

Construction Intelligence Center, for its part, said the industry’s output value in real terms is expected to rise at an average of 9.8 percent a year over the forecast period.

The Philippine construction industry is consequently expected to rise from $34 billion in 2016 to $54.3 billion in 2021, measured at constant 2010 US dollar exchange rates.

According to Credit BPO, the Philippine construction industry was among the largest economic powerhouses in 2011, and it is forecasted that it will remain to be so in the following years.

“From 2009 to 2013, the compounded annual growth rate (CAGR) of the construction industry reached 12.01 percent due to robust public investments in the infrastructure and residential markets,” Credit BPO said.

It added that experts reported the same public investments would be the main growth drivers in 2014 to 2018, which is equivalent to 9.90 percent CAGR.

“Construction of more residential properties, bridges, roads, offices and power plants will contribute to the growth of the construction industry,” Credit BPO said.

The Duterte administration intends to spend around $158 billion over the next five years on its Build, Build, Build program, so that infrastructure spending would reach 7.3 percent of GDP by the end of the President’s term.

The Build Build Build program is anchored on the belief that through heavy investment on the country’s infrastructure, a sustained, robust and all-inclusive socio economic development can be achieved.

The Department of Transportation (DOTr) said this means “more roads, more bridges, more railways, more airports and more ports being constructed, more jobs being generated and more smart cities to live in.”

The program is composed of 75 flagship projects—six airports, nine railways, three bus rapid transits, 32 roads and bridges, and four seaports that will help bring down the costs of production, improve rural incomes, encourage countryside investments, make the movement of goods and people more efficient, and create more jobs.

The projects also include four energy facilities that will ensure stable power supply at lower prices; 10 water resource projects as well as irrigation systems that will raise agricultural output; five flood control facilities that will help protect vulnerable communities as well as boost their resilience against the impact of climate change; and three redevelopment programs that will deliver sustainable solutions to best meet the needs of urban populations, she added.

For this year, the national budget program has earmarked P1.1 trillion for infrastructure development with the budgets of the Department of Public Works and Highways (DPWH) and DOTr growing by 40.3 percent and 24.3 percent, respectively.

For railways, DOTr said that five railways lines will start or continue construction this year, which aims to expand the current 72 km railways to 1,500 to 1,900 km of railways by end of administration.

Among the railways includes PNR Clark , PNR-Bicol the stretch that will connect Metro Manila to Los Banos, Laguna, Metro Manila Subway that will start from Mindanao Ave in Quezon City Mindanao Railway in Quezon City leading up to NAIA.

DOTr also said it is adopting two approaches to address the worsening traffic congestion in the aviation sector – expand the existing airports and build new airports within Central Luzon and Metro Manila.

Source: http://malaya.com.ph/business-news/business/construction-industry-seen-sustaining-growth

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