By Jochebed B. Gonzales
Senior Researcher
THE NUMBER of approved building permits continued to grow in the first quarter albeit at a slower rate compared to a year earlier as well as a quarter earlier, the government reported yesterday.
According to preliminary results from the Philippine Statistics Authority, the number of construction permits rose 2.6% from a year earlier in the first quarter to 36,002. The growth rate is lower than the 3.6% booked in the preceding quarter and the 7.1% posted in the first three months of 2017.
These construction projects were equivalent to 8.569 million square meters of floor space, up 11.6% year on year, with the value of the construction amounting P101.729 billion, up by about a third from a year earlier.
Residential construction approvals, which accounted for 70.4% of the total approved building permits in the first quarter, declined by 1.2% from a year earlier, though on a value basis construction amounted to P64.439 billion, up 70.6% from a year earlier.
Single-detached homes accounted for 21,776 permits, followed by apartments at 3,109. Duplexes and quadruplexes numbered 379 while condominiums and other residential projects were 44 and 54, respectively.
Permits for non-residential construction increased 11.8% to 5,587 and the corresponding projects were valued at P31.099 billion with a floor area of 3.377 million square meters. Within the category, commercial building permits were up 20.2% year-on-year at 3,579 and institutional building permits rose 13.3% to 1,081.
Region IV-A (Calabarzon) topped the regions with 8,199 in approved construction permits, with 6,129 of them residential.
Region VII (Central Visayas) and Region III (Central Luzon) followed with 4,333 and 3,589 permits, respectively. Approved non-residential projects in these regions numbered 614 and 735, respectively.
Among the provinces, Cavite had the most number of approved permits, comprising 10.9% of the total or 3,934. Cebu had a 5.1% share or 1,844 while Batangas accounted for 4.3%, equivalent to 1,546.
In terms of value, the National Capital Region (NCR) had projects amounting P36.439 billion, with P31.696 billion representing residential construction, notably mostly condominiums which were valued P27.416 billion. The value of non-residential projects in the region during first quarter was P2.436 billion.
Projects in Calabarzon were valued P14.906 billion while Central Visayas and Central Luzon came in at P13.115 billion and P8.082 billion, respectively.
Sought for comment, Angelo B. Taningco, economist at Security Bank Corp., said: “I think the increase in non-residential construction appears to be in response to strong office demand, whereas the decline in residential construction may be related to rising inflation, which tends to restrict household spending.”
Despite the residential segment’s dip in volume of permits, Rizal Commercial Banking Corp. (RCBC) economist Michael L. Ricafort, noted the growing space meant for residential occupancy especially in Region IV-A.
“The 29.2% increase in residential building [by floor area] reflects the continued growth in housing loans of banks and the expansion of developers, especially in areas outside Metro Manila where more lots/spaces are available,” he said.
“Region IV (including Cavite) is also host to the country’s biggest industrial zones/areas outside Metro Manila and also a host to growing commercial/retail/office space areas,” added Mr. Ricafort.
Moving forward, the economists were upbeat on construction activity, maintaining a rosy outlook for the real estate sector as well as the government’s aggressive infrastructure spending.
“Overall, my outlook on construction activity is positive especially with buoyant office demand, relatively low interest rates, and the government’s strong push for public infrastructure,” said Security Bank’s Mr. Taningco.
RCBC’s Mr. Ricafort added: “Construction activity could still continue to grow in the coming months/years, reflecting the boom in real estate activities and increased growth in infrastructure spending.”