THE INCREASE in building projects amid strong demand in high rise residential and commercial properties made the construction sector one of the country’s growth drivers last year.
Philippine Statistics Authority data showed that the sector’s gross value added, or the contribution of a sector to gross domestic product (GDP), grew 13.7% to P519.70 billion, faster than the previous year’s 11.6%. This is the fastest among other sectors for the year as well as the only one that posted double-digit growth figures.
Leading the charge was public construction, which posted double-digit growth figures for the entire year — expanding as fast as 38.5% in the first three months of 2016 before tapering into the fourth quarter which recorded a lower albeit still robust 19.2% growth. For the year, it grew by 28%, surpassing 2015’s 25.5%.
The same trend could be seen in private construction, but it nevertheless posted 11.5% growth last year, beating the 7.6% reading in the year before.
On a quarterly basis, public construction has been growing by seven quarters straight (since the second quarter of 2015). This was after the time the government has cut back on infrastructure spending in 2014. On the other hand, private construction’s growth streak extended to 11 quarters as of 2016.
In terms of its contribution to employment, the sector’s share to the country’s total employment is 8.2% with 3.37 million workers said to be employed in the sector during the period. The figure represented a 25% increase as compared to some 2.69 million workers in 2015.
In a report released by the Construction Industry Authority of the Philippines for the year, the robust growth figure in public construction was attributed to an increase in government spending “as it fast-tracks implementation of infrastructure projects of the Aquino administration and the Golden Infrastructure projects of the Duterte administration.” Similarly, the increase in demand for high-rise residential and commercial buildings were cited for the growth in private construction.
Looking forward, the sector is said to accelerate further as much hope is placed in the current administration’s “Build, Build, Build” program. This year, the government appropriated P847.2 billion (or 5.3% of GDP) in the 2017 National Budget for infrastructure projects.
Under this arrangement, the government will spend some P8 trillion-P9 trillion for the next six years, representing a rise to around 7.4% of GDP in 2022 from the planned 5.3% of GDP this year. The figure is a far cry to previous years when infrastructure spending averaged some 3% of GDP. The government has said that the program will be financed through expansionary fiscal deficits and through the planned tax reform which will increase higher revenue collection efforts. – Leo Jaymar G. Uy
