AFTER suffering a heavy blow from the Covid-19 pandemic, the construction industry in the Philippines is expected to bounce back in 2021 and grow at an annual average rate of 8.3 per cent from then till 2024, taking its output value up to US$75.1 billion that year, said data and analytics firm GlobalData in an August 20 note.
The Philippines' construction industry had been the fastest-growing in Asia-Pacific before the pandemic, but is now expected to contract by 9.2 per cent in 2020.
In the second quarter, the industry contracted 33.5 per cent year on year, as construction activities were disrupted amid lockdown measures.
“Apart from the complete halt in the construction activities in the second quarter, the output will also be affected this year by the re-allocation of government resources to address the current crisis," said GlobalData construction analyst Dhananjay Sharma, noting that in June, the authorities reduced their infrastructure spending for 2020 by 15.8 per cent "due to funding re-alignment to tackle the pandemic".
On the brighter side, construction work has resumed since mid-May, and the resumption of infrastructure projects is meant to be a key driver in economic revival, not least with the US$18.9 billion Build, Build, Build (BBB) programme that had been planned prior to the pandemic.
The 4.5 trillion peso (US$92.4 billion) national budget for the 2021 financial year includes 1.1 trillion pesos allocated for public infrastructure, which is expected to support some major flagship projects under the BBB programme.
"Spurred on by the increased allocation for infrastructure investment in FY2021 budget and the continued attractiveness of the Philippines market, the construction industry will rebound and grow by 11.1 per cent in 2021," said Mr Sharma.
Over the medium and long-term, he expects the industry’s output to be supported by increased investments in infrastructure, housing, and energy.