Manila (Philippine Daily Inquirer/ANN) - Construction projects are expected to nearly triple in value next year as the Philippines' growing economy supports demand for infrastructure, according to an industry report.
In a report, construction market research firm BCI Asia described 2013 as the "birth of new construction" for the Philippines with P1.18 trillion worth of projects projected to start. That is a 264 percent growth compared to the previous year.
"This is primarily the result of government measures to push the growth of the economy by increasing government expenditure, the growing electricity demand, and the upcoming 2013 election," the report said.
Various subsectors from residential to civil construction are getting added boost from robust remittances that spur real estate purchases among families of overseas workers and the strong peso, which benefits developers who import
construction materials, BCI said.
Noting the government's commitment to spend on infrastructure and encourage related private sector projects, BCI said civil construction works on roads, bridges and facilities for utilities (water treatment plants, power stations and transmission towers, etc.) will drive much of the momentum for new construction projects in 2013.
"The building construction industry is also set to see a robust year-on-year growth of 145 percent in 2013. The growth in the building construction industry is triggered by improving investment and economic climate in the country," the report said.
The coming elections are also seen to drive activity in the construction sector, among others.
"Usually in an election year, civil construction (roads, bridges, etc.) types of projects are being launched all over the country," BCI country manager Dean Borg said in a briefing Wednesday to launch the report.
The boom in construction, especially in residential subsector, is in turn pushing demand for power. As such, demand for utilities-related construction projects (power stations, transmission lines, water treatment facilities) is seen to increase.
In 2012, the domestic construction market experienced an "aftershock" from international financial woes in 2011 and the resulting drop in early-stage construction projects to "extremely low level of activity." BCI's report said the impact was most dominant in the third and fourth quarters.
This year, the economy is expected to grow by 5 to 6 percent. The Philippine Development Plan set an average annual growth target of 7 to 8 percent per year from 2010 to 2016.