The Philippine construction industry is expected to grow 9.2 percent annually to reach $47 billion by 2020, a London-based advisory company said.
Timetric, a provider of online data, analysis and advisory services on key financial and industry sectors, said the rate of construction growth in the Philippines would remain relatively high until 2020, bolstered by greater focus on infrastructure improvement and the continued expansion of residential and commercial buildings.
“Favorable government policies with regards to public-private partnership will also play an important role,” Timetric’s Construction Intelligence Center said in a report.
Danny Richards, lead economist at Timetric’s CIC, said “the change in government in the Philippines, with the presumptive president-elect Rodrigo Duterte coming to office later this year, is not expected to derail the economic growth agenda, and the large-scale infrastructure development program, funded through PPPs, will continue to be promoted.”
Timetric said from $30.2 billion in 2015, the country’s construction sector would have a compounded annual growth rate of 9.22 percent over the next five years to reach $47 billion by 2020.
“The residential market is expected to remain the largest in the Philippine construction industry over the next five years, to account for 33.9 percent of the industry’s total value in 2020. It will be supported by the expansion of the middle-class population, government efforts to urbanize underprivileged rural areas, and housing projects for low-and middle-income groups,” it said.
Timetric said the Home Development Mutual Fund (Pag-IBIG Fund) financing scheme was expected to provide continued support to low-and middle-income households, which would help the market to grow further.
The residential market is closely followed by the infrastructure market, which is expected to maintain second position, it said. It is also expected to be the fastest growing in the industry, driven by government plans to develop high-speed rail links, highways and sea ports through PPPs.
Timetric said it expected the infrastructure market to reach $14.7 billion in 2020, registering a nominal CAGR of 14.14 percent.