Building permits decline in June

As construction slows

MANILA, Philippines —  The number of construction projects based on approved building permits dipped in June from a year ago as developers slowed down residential projects amid high vacancies.

Construction projects from approved building permits reached 17,081 in June, down by 0.3 percent from 17,126 in the same month last year, preliminary data from the Philippine Statistics Authority showed.

While the number of construction projects declined slightly, their total value rose by 22 percent to P74.34 billion in June from the P60.94 billion in the same month last year.

By construction type, residential buildings accounted for around 67 percent of the total construction projects in June.

However, residential building projects declined by two percent to 11,392 in June from last year’s 11,634 projects.

The value of residential projects also fell by 26 percent to P20.24 billion in June from the previous year’s P27.29 billion.

Meanwhile, non-residential construction projects went up by five percent to 3,352 in June from 3,204 projects last year.

These projects amounted to P43.80 billion in June, 56 percent higher than the P28.01 billion value last year.

Additions or those involving increases in height or area of an existing building declined by two percent to 538 projects in June from the previous year’s 548.

However, the value of these projects climbed by 19 percent to P728.84 million in June from P612.74 million a year ago.

Alteration and repairs also declined by seven percent to 1,189 projects in June from the previous year’s 1,284 projects.

The value of alteration and repair projects surged by 112 percent year-on-year to P8.82 billion in June.

Other construction projects increased by 34 percent to 610 in June from the previous year’s 456.

In terms of value, other construction projects went down by 13 percent year-on-year to P750.43 million in June.

“The continued year-on-year decline in construction or approved building permits, especially on residential projects, could have still been a function of excess supply or glut especially in residential condo units and higher vacancy rates  for residential, office, commercial property segments in some areas especially where POGOs (Philippine offshore gaming operators) clustered in view of the ban or exit of POGOs since the latter part of 2024,” Rizal Commercial Banking Corp. chief economist Michael Ricafort said in an email.

He said that the Middle East conflict that started in February, which  disrupted supply chains, drove up prices of construction materials, interest rates and borrowing costs, also partly weighed on new residential developments and demand from buyers.

In addition, underspending by the government particularly on infrastructure amid the flood control controversy affected construction activity.

“For the coming months, catch up spending by the national government especially on infrastructure based or hinged on better governance standards would be a major catalyst for faster economic or GDP (gross domestic product) growth, including construction or building permits,” he said.