APPROVED building permits fell 10.9% year on year in the fourth quarter as high interest rates dampened construction activity, the Philippine Statistics Authority said.
Building permits issued, a proxy for construction starts, fell to 34,675 in the fourth quarter from 38,909 a year earlier. The total was also lower than the 39,052 permits issued in the third quarter.
The projects represented by the permits were valued at P111.14 billion — up 2.6% from a year earlier, and were a combined 9.70 million square meters (sq.m.).
Value was lower than the P121.16 billion from a year earlier.
The average cost per sq.m. was P10,683.4, up 5.6% from a year earlier.
In a Viber message, John Paolo R. Rivera, president and chief economist at Oikonomia Advisory & Research, Inc., said higher interest rates hampered growth of capital-intensive industries.
“It is too costly to borrow… Even if inflation is slowing down, the cost of borrowing remains high,” he added.
Residential construction permits fell 16.3% year on year to 23,009 permits.
Residential condominium permits grew 50% to 18 permits, a turnaround from the 52% decline seen a year earlier.
Meanwhile, single homes, duplexes/quadruplexes, and permits for the types of residence fell 17.9%, 32.3%, and 50%, respectively.
“As the population concentration is in urban areas with scarcity of land, compact living has been the trend to keep workers close to their workplaces,” Mr. Rivera said.
Non-residential permits, which accounted for 21.9% of the total, grew 2.8% to 7,607 approvals, slowing from 16.4% a year earlier and 6.6% in the third quarter.
Non-residential permits were valued at P55.21 billion in the quarter, up 17.3% from a year. — Bernadette Therese M. Gadon
