Vol. XXII, No. 75 [ BusinessWorld Online ]
Friday, November 7, 2008 | MANILA, PHILIPPINES
GOVERNMENT INFRASTRUCTURE projects in preparation for the 2010 elections are expected to save the construction industry from a US-led global economic slowdown next year, industry leaders said yesterday.
"The crisis may have some negative impact on construction projects next year," Philippine Constructors Association (PCA) President Anthony Fernandez told a briefing.
He said construction activity involving new manufacturing and business process outsourcing (BPO) facilities, as well as residential units might slow in 2009.
PCA Executive Director Manolito P. Madrasto said the impact of the financial crisis in the US and Europe on the construction sector is expected to be felt starting March next year. "We really don’t know the extent of the impact of the crisis next year, but we are not worried," he said, noting that the 2010 elections would mean new infrastructure projects.
"Politicians cannot win elections without public works projects," he added. He added that the sector was also anticipating the $100-billion fund being pushed by the government for infrastructure projects in response to the financial crisis.
"Members of the PCA will be taking part in these public-private partnerships and will be shifting to working on government projects if there won’t be much work in the private sector," he said. Mr. Madrasto said most of the soon-to-be finished projects are BPO facilities that could boost investments.
He also noted that while 2007 was a big year for the construction sector, which posted 20% growth, this year’s growth would be slower at 12% due to less government spending on infrastructure. "Next year, there will still be growth. It will not be zero," he added.
Mr. Fernandez said construction firms are preparing for the crisis. "We are looking at what we can do in response to the crisis. We are looking at ways to make the construction sector more competitive in terms of design and try to expand overseas." — LDD