More buildings, houses rising amid subdued construction costs
MANILA, Philippines — Approved building permit applications bounced back in April as slower increases in the prices of building materials boosted construction activities.
Preliminary data from the Philippine Statistics Authority (PSA) showed building projects covered by the permits increased by 12.8 percent year-on-year to 13,332 in April from a 14.2 percent contraction in March.
This was equivalent to 3.35 million square meters (sq m) of floor area valued at P38.99 billion. The numbers represented a turnaround from the 12.4 percent and 22.7 percent contractions, respectively, in March.
“Slower growth in CMRPI (construction materials retail price index) recently prompted increases in demand for construction. This enticed construction companies to pursue projects to take advantage of the relatively cheaper materials, reducing their costs,” Oikonomia Advisory and Research Inc. president and chief economist John Paolo Rivera said in a Viber message.
Retail prices of construction materials in Metro Manila, as measured by the CMRPI, grew by 1 percent in May, slower than the 1.2 percent seen in April and 2.6 percent in the same month last year.
Residential projects
PSA data, meanwhile, showed that permits for residential projects, which made up 65.7 percent of the total, increased by 9.6 percent to 8,764. These projects were valued at P17.09 billion, for a total floor area of 1.5 million sq m.
Single homes, which account for 82.2 percent of the total residential area, dropped by 0.2 percent to 7,202.
Meanwhile, duplex or quadruplex homes increased by 36.8 percent with 130 building permits.
This was followed by apartment buildings and residential buildings, with 1,421 (up by 111.1 percent) and 3 (up by 50 percent), respectively.
Nonresidential projects tallied 3,057 approvals during the period, an increase of 18.3 percent in April.
Broken down, commercial construction accounted for 2,165 approvals, up 17 percent; industrial projects 243, up 23.4 percent; and other nonresidential works with 83, up by 2.5 percent.
Institutional building permits rose 34.9 percent to 468, while agricultural projects fell by 10.9 percent to 98 in April.
Rivera warned that higher inflation may still dampen growth in the construction sector.
“Construction is very sensitive to cost changes given their scale and scope. A slight increase is too costly for them because of the huge capital expenditure they need to make and vice versa,” he said.
