BUILDING PERMIT applications data are pointing to double-digit growth for the residential and office/commercial segments in 2019, with a slight tapering off to at least the high single digits over the next few years, Fitch Solutions Macro Research said.
“We expect the Philippines’ residential and non-residential building sector will grow by an average of 9.3% annually from 2019 to 2028,” it said in its industry trend analysis report.
Fitch noted that it expects 10.4% expansion in the residential sector in 2019, and annual growth of 8.9% until 2028. It said urbanization will fuel demand for more housing, driving people to urban centers like Metro Manila, Davao City, and Cebu City.
“These are cities that have experienced an influx of rural population over the past decade, and have suffered from various episodes of housing crisis, largely as a consequence of a low supply of affordable housing. Such a scenario resulted in the creation of numerous slums and shanty towns, often ill-equipped in terms of water and sanitation facilities, posing a hazard to both health and the environment,” Fitch said.
It said growth in residential building can be gleaned from building permits data for residential projects, which increased by 9%, year-on-year in the first quarter.
In 2018, the government approved 114,000 residential building permits, up 12,000 from a year earlier.
It said that it expects 12.5% growth in the non-residential building sector in 2019, with an annual average growth of 10.5% over the next 10 years, driven by the commercial sector.
In the first quarter of 2019, 6,400 such permits were awarded, up 15% year-on-year. More than half involved the construction of commercial buildings.
Fitch also said that the creation of the Department of Human Settlements and Urban Development (DHSUD) will help address issues related to housing, particularly in the affordable segment.
“Although the DHSUD has since encountered budgetary issues, we are positive that such issues will be ironed out in the long run and aid in the provision of affordable housing for the population,” Fitch said. — Vincent Mariel P. Galang