Upbeat construction sector boosts real estate growth

CEBU, Philippines - Cebu’s upbeat economy has paved way for a livelier construction sector in 2013, resulting in the robust growth of the real estate sector.

Despite apprehensions on the upcoming ASEAS integration, the country’s construction sector posted an all-time high performance in 2013, with Cebu as one of the highest performers.

The latest record from the National Economic and Development Authority (NEDA-7) showed that around 4,891 new construction projects were approved in the first semester of 2013 valued at P7.83 billion.

Eighty-five percent of approved construction projects were residential buildings and 11 out of 13 projects registered with the Board of Investments (BOI)  in the first semester of 2013 were for mass housing projects with estimated project cost of P3.22 billion.

Amid this encouraging performance of the construction sector, the Philippine Constructors Association (PCA) expressed apprehension of its future in the upcoming ASEAN integration in 2015.

In a statement, PCA Executive Director Manolito Madrasto warned against the “bahala na” attitude of  Filipinos stressing that now is not the time for complacency.

The year 2013 served as the turning point for the construction sector to guard their turf and strengthen their domestic foothold, as the Filipino players are not ready for the AFTA implementation in 2015.

“With the implementation of AFTA in 2015 constructors from ASEAN countries, provided that they are licensed in their ASEAN country of origin, will be allowed to engage in construction contracting in the Philippines. Likewise, licensed Filipino constructors will be able to engage in projects in other ASEAN countries,” said Madrasto.

He further stated that unless Filipino contractors are ready to meet the challenge, they could lose a substantial slice of the local market to foreign contractors.

“This does not only apply to general contractors but also sub—and specialty contractors. The foreign contractors will bring with them their sub—and specialty contractors,” he warned.

He stated that Philippine contractors must upgrade the skills of both themselves and their workforce to meet this challenge as the current construction boom is bound to attract a great number of foreign contractors who were previously not allowed to carry out operations in the Philippines.

PCAB Chairman Ramon Allado also stated that PCAB is taking steps to “beef” up contractors’ licensing in order that they are better equipped to meet the challenge. To this end the Rules and Regulations (IRR) under RA 4566 will be amended soon.

The amendment process is in its final stages and has already been submitted to the Construction Industry Authority of the Philippines (CIAP) and, once approved, will be submitted to the president for signature.

Among the amendments are the following: The introduction of the AAAA category. This requires a capitalization (net-worth) of at least P1 Billion and foreign contractors (not limited to ASEAN) will be issued a regular PCAB license and may enter into contracts of a value in excess of P1 Billion (not below this value).

He mentioned that currently 12 of the country’s 242 AAA contractors qualify for the AAAA category. The change of Category Trade to Category E in order to eliminate the confusion some parties have as to the meaning of Category Trade.

Allado added Filipino contractors should be better equipped to deal with foreign contractors come 2015.

At the start of 2013, The Philippine Constructors Association in the Philippines Inc., (PCA) anticipated a promising 2013. Although, this projection was achieved towards the end of this year, players are facing another challenge as the country enters the ASEAN Economic Community in 2015. /JOB (FREEMAN)