Driven by the government’s efforts to boost spending on the country’s infrastructure, the value of the construction industry in the Philippines (measured at constant 2017 US dollar exchange rates) is expected to grow at an annual average of 7.9% from US$47.8 billion in 2019 to US$70 billion in 2024, according to data and analytics company GlobalData.
GlobalData’s report, ‘Construction in the Philippines – Key Trends and Opportunities to 2024’ reveals that the industry’s robust expansion over the forecast period will be supported by the government’s focus on the development of the country’s transport, energy and utilities infrastructure as well as on addressing the country’s housing needs, rising population and urbanisation.
Dhananjay Sharma, construction analyst at GlobalData said, “In March 2019, the government launched the Philippine Construction Industry Roadmap 2020–2030, with an aim to increase the construction industry’s contribution to the Philippine economy from PHP2.3 trillion (US$44.1 billion) in 2018 to PHP130 trillion (US$2.5 trillion) by 2030.”
GlobalData expects infrastructure output to register annual average growth of 9.5% in real terms during the period 2020–2024. In October 2019, the government increased the number of flagship infrastructure projects under the ‘Build, Build, Build program’ from 75 to 100. Out of this, 38 projects are expected to be completed and 22 to be partially operational by 2022. In the 2020 budget, the government also increased its allocation for the Department of Public Works and Highways by 25%.
Although the five-year outlook remains positive, there are major risks in the short-term. “The outbreak of the coronavirus in China – one of the Philippines’ most important trading partner – and its subsequent spread across the world, poses a major downside risk to the country’s economy and also the construction industry in the short term,” said Mr Sharma. “However, the industry will bounce back once the threat of the coronavirus is neutralised, particularly because of the underlying strong growth potential in infrastructure.”
Image: lineofxite / Pixabay