Explore overseas projects, construction firms told

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CONSTRUCTION COMPANIES are being encouraged to explore overseas and outsourcing projects as they try to recover from the decline in projects during the lockdown.

While the industry is expected to rebound after the pandemic, a construction executive said that companies can work on foreign projects while they wait.

“When the pandemic came in and we were on lockdown, the procedures that we were discussing for over a year were suddenly simplified. We were forced to look at new construction techniques and methods because of the need to survive,” EEI Corp. Executive Vice-President Norman K. Macapagal said in a press release from the Trade department.

Mr. Macapagal said that companies can set up a temporary or permanent foreign branch, or work with a local partner. He added that companies must study overseas taxation and labor regulations.

The construction industry needs help from the government, he said, because overseas projects are both time-consuming and expensive.

Fitch Solutions Country Risk & Industry Research in June downgraded its forecast for the industry as it anticipated delays to the government infrastructure program due to the budget for infrastructure being redirected to coronavirus disease 2019 (COVID-19) containment. Fitch Solutions earlier said that it expected a slowdown in the industry caused by halted construction operations that are usually concentrated in areas affected by the stricter lockdown.

Construction starts, as measured by approved building permits, also fell 22.4% in the first quarter.

Department of Trade and Industry Undersecretary Abdulgani M. Macatoman said overseas construction is a major revenue generator.

“Despite a major decrease in the number of Philippine construction services exporters from over a hundred in the 1980s to 37 at present, the overseas construction industry still contributed its share to the economy: a total amount of $116.08 million,” he said.

Civil engineering firm ESCA, Inc. sees engineering service outsourcing as a high-value service.

Philippine engineering service outsourcing is valued at $250 million, representing one percent of the country’s total outsourcing sector. It also accounts for 0.5% of global engineering service outsourcing, the Trade department said.

“The challenge is to move from voice to non-voice (services), in particular, to go into the high value-added activities under KPO [knowledge process outsourcing] and link these services embedded to manufacturing, such as finance, design and engineering,” ESCA, Inc. President Dr. Ernesto De Castro said.

Mr. De Castro said Filipino engineers should be trained to build intelligent models for use in construction, with several countries like Singapore, Malaysia and Thailand requiring this knowledge for their projects. — Jenina P. Ibañez