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Philippine construction works seen growing over 50% by 2020

A report by London-based Timetric’s Construction Intelligence Center (CIC) showed the Philippine construction industry is seen to grow to $47 billion by 2020 from $30.2 billion last year on a compound annual growth rate of 9.22 percent. File photo

MANILA, Philippines – Construction activities across the country are expected to remain busy in the next four years, with the local construction industry seen growing more than half by 2020.

A report by London-based Timetric’s Construction Intelligence Center (CIC) showed the Philippine construction industry is seen to grow to $47 billion by 2020 from $30.2 billion last year on a compound annual growth rate of 9.22 percent.

According to the report, the rate of construction growth in the Philippines will remain relatively high until 2020, fueled by greater focus on infrastructure improvement and the continued expansion of residential and commercial buildings.

“Favorable government policies with regards to public-private partnership (PPPs) will also play an important role,” it said.

Likewise, the entry of a new administration this year is not seen as an impediment in the continued growth of the industry.

“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’s CIC lead economist Danny Richards said.

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The country’s residential market is expected to remain the largest in the Philippine construction industry over the next four years as it would account for 33.9 percent of the industry’s total value in 2020, the report said.

Timetric said the growth in the residential market would 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.

In addition, it said the government’s Home Development Mutual Fund or Pag-IBIG Fund financing scheme that provides continued support to low-and middle-income households would help the market grow further.

After the residential market, the infrastructure market is seen as the second fastest growing sector in the industry, driven by government plans to develop high-speed rail links, highways, and sea ports through PPPs.

“For example, in 2015, Japan announced that it would provide P89.6 billion for the construction of the first phase of the North?South commuter rail project, one of the country’s major railway development projects.  As a result, Timetric expects the infrastructure market to reach $14.7 billion in 2020, registering a nominal compound annual growth rate of 14.14 percent,” the report said.

Timetric is a London-based provider of online data, analysis and advisory services on key financial and industry sectors.

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