Vol. XXII, No. 191 [ BusinessWorld Online ]
Friday, May 1, 2009 | MANILA, PHILIPPINES
CONSTRUCTION ACTIVITY this year will likely slow but not contract from 2008 levels, an official of the Philippine Constructors Association, Inc. said on Wednesday.
Government-led projects are driving growth while the construction of middle-income housing has been the primary mover from the private sector so far in the first quarter, the industry group president, Anthony L. Fernandez said.
Property analysts gave mixed reactions, with one concurring while another was more downbeat on demand for middle-income housing.
"It will be below [2008 levels] but it shouldn’t be negative," Mr. Fernandez told reporters at the sidelines of Robert Bosch, Inc.’s anniversary celebration.
Growth in the construction sector slowed to 8.2% in 2008, with activity primarily driven by private-sector projects, data from the National Statistical Coordination Board show.
"As compared to two years ago where activity was private-sector led, now it is from the government. It used to be 60% private sector and 40% government. Now it is reversed," Mr. Fernandez said in Filipino.
The government had announced a P330-billion economic stimulus package for the year to generate jobs amid the economic downturn partly through infrastructure building.
For private sector projects, middle-income housing has remained strong, Mr. Fernandez said.
Commercial construction such as those for new shopping malls, he added, is also active but "is not as strong as the past two years."
Asked to comment, CB Richard Ellis, Inc. Research Director Victor J. Asuncion shared Mr. Fernandez’ outlook, particularly on housing.
"I agree. It’s an end-user market still. Mid-market horizontal and vertical housing is fueling construction activity," he said in a text message yesterday.
Prince Christian R. Cruz, senior economist at Global Property Guide, gave a more cautious projection.
"If the Philippines’ economic growth will [just] slow down, we expect middle-income housing will be unaffected. But if the economy contracts, there will be repercussions to housing demand," Mr. Cruz said in a telephone interview yesterday.
"I think it’s yet to be seen if [this segment] will do well this year," Mr. Cruz said. — Jessica Anne D. Hermosa