Industry Watch:

Philippine
Construction
Christian Vallez
For the Construction Industry Authority of
the Philippines (CIAP)
April 2021
Construction Industry Watch

Indicators Latest Source

April 2021 GFCF and Gross Value Added - 4Q20  PSA

Overall
Construction 
Construction Employment  March 2021  PSA

Construction activity
Construction Materials Price March 2021  PSA
Index 

remains tepid although Approved Building Permits for 4Q20  PSA

Private
Construction 
offshoots of recovery Loans for Construction  March 2021  BSP
are signalled by Business Confidence Survey – 1Q21  BSP

improvements in Construction 
National Government March 2021 DBM

Public

employment, Infrastructure and Capital
Outlay 
infrastructure spending,
and construction ➢ KEY TAKEAWAYS 
materials price growth.
Sources
o BSP – Bangko Sentral ng Pilipinas
o DBM – Department of Budget Management
o PSA – Philippine Statistics Authority
Construction Industry Watch – April 2021 BACK TO
SUMMARY

CONSTRUCTION GFCF and GVA % YoY Growth

OUTPUT 60%
40%
Private Public GVA Construction GFCF

20%
0%
-20%
In 4Q20 Construction Gross Value -40%
Added (GVA) and Gross Fixed -60%
Capital Formation (GFCF)

1Q19
1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

3Q17

4Q17

1Q18

2Q18

3Q18

4Q18

2Q19

3Q19

4Q19

1Q20

2Q20

3Q20

4Q20
continued to decline year-over-
year (y-o-y) although both Contribution to % YoY Growth
30%
showed improvement quarter- Public Private GVA Construction GFCF
20%
over-quarter ((q-o-q).
10%
0%
Both public and private sectors -10%
remain in contraction territory. -20%
-30%
-40%
-50%

1Q19
1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

3Q17

4Q17

1Q18

2Q18

3Q18

4Q18

2Q19

3Q19

4Q19

1Q20

2Q20

3Q20

4Q20
Source: PSA
Construction Industry Watch – April 2021 BACK TO
SUMMARY

CONSTRUCTION Employment in Construction Sector, Million Pesons

EMPLOYMENT
Employed (Millions) % of Total

6.0 12%
March employment reached
record levels in March 2021, up 5.0 10%
20% month-on-month (m-o-m)
coinciding improvement in 4.0 8%
infrastructure outlay.
3.0 6%
Construction accounted for 11%
of total employment. 2.0 4%

1.0 2%

0.0 0%

Oct-16

Oct-17

Oct-18

Oct-19

Oct-20
Jul-16

Jul-17

Jul-19

Jul-20

Mar-21
Apr-16

Apr-17

Apr-18
Jul-18

Apr-19

Apr-20

Feb-21
Jan-20
Jan-16

Jan-17

Jan-18

Jan-19

Jan-21
Source: PSA
Construction Industry Watch – April 2021 BACK TO
SUMMARY

CONSTRUCTION
MATERIALS
Construction Materials Price Inflation (NCR) and National Headline Inflation, % YoY
8.0% Wholesale - Construction Materials Retail - Construction Materials

PRICES - NCR
Headline Inflation
7.0%

Prices of construction materials in 6.0%

the National Capital Region

5.0%
(NCR) continued an uptrend y-o-
y (though flattish m-o-m) but still 4.0%
well below headline inflation.
3.0%
Drivers for wholesale prices were:
concrete products and cement; 2.0%
doors, jambs, and steel
1.0%
casement, electrical works.
0.0%
Drivers for retail were: carpentry
materials and painting materials -1.0%

Jul-18

Jul-19

Jul-20
Apr-18

Oct-18

Apr-19

Oct-19

Apr-20

Oct-20

Apr-21
Jan-18

Jan-19

Jan-20

Jan-21
Source: PSA
Construction Industry Watch – April 2021 BACK TO
SUMMARY

APPROVED Approved Building Permits by Floor Area, Thousand Square Meters

BUILDING PERMITS Residential

Residential (6MA, % YoY)
Non-Residential
Non-Residential (6MA, % YoY)
Total (6MA, % YoY)
12000 80%
Approved building permits (a
60%
leading indicator of construction 10000
activity) showed green shoots of 40%
recovery in 4Q20, improving q-o- 8000
q although still at high double- 20%
digit decline y-o-y.
6000 0%
Broad-based weakness indicated.
-20%
4000
-40%
2000
-60%

0 -80%

4Q16
1Q16
2Q16
3Q16

1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20
2Q20
3Q20
4Q20
Source: PSA
Construction Industry Watch – April 2021 BACK TO
SUMMARY

LOANS FOR Universal and Commercial Bank Loans for Construction, Php Billions

CONSTRUCTION 400 Construction 3-month average % YoY 50%

45%
350
Despite lower interest rates, 40%
construction loans remained on 300
35%
downward trend in March,
signaling protracted consumer 250
30%
demand rebound.
200 25%

20%
150
15%
100
10%
50
5%

0 0%
Mar-18

Jul-18

Mar-19

Jul-19

Mar-20

Jul-20

Mar-21
Sep-18

Sep-19

Sep-20
Nov-20
May-18

Nov-18

May-19

Nov-19

May-20

Jan-21
Jan-18

Jan-19

Jan-20
Source: BSP
Construction Industry Watch – April 2021 BACK TO
SUMMARY

BUSINESS Business Expectations Survey, Confidence Index

CONFIDENCE BES - Overall

Construction, On the Macroeconomy, Current Quarter
60 Construction - Own Operations, Current Quarter
Industry Sector (Macroeconomy)
The construction sector’s business 50
confidence showed an
improvement in 1Q21 in terms of
40
activity expectations even while
macroeconomic outlook
30
continues to deteriorate.

20

10

-10
1Q17

2Q20
2Q16
3Q16
4Q16

2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20

3Q20
4Q20
1Q21
Source: BSP
Construction Industry Watch – April 2021 BACK TO
SUMMARY

INFRASTRUCTURE National Government Infrastructure and Capital Outlay, PHP Billion

SPENDING 200 80%

Disbursements (B Pesos) 3-month average % YoY
180
60%
Government infrastructure 160
spending continued to gain
140 40%
momentum in March, growing
41% y-o-y. 120
20%

January-March year-to-date (YTD 100

is up 25%. 80
0%

60 -20%
40
-40%
20

0 -60%

Oct-20
Jul-17

Jul-18

Jul-19
Apr-17

Oct-17

Apr-18

Oct-18

Apr-19

Oct-19

Jul-20
Apr-20
Jan-19
Jan-17

Jan-18

Jan-20

Jan-21
Source: DBM
Construction Industry Watch – April 2021 BACK TO
SUMMARY

Construction is showing early signs of

improvement, driven by infrastructure, even while
private sector activity remains in negative territory.
KEY
TAKEAWAYS Increased infrastructure momentum has helped
drive construction employment which has
exceeded pre-pandemic levels and accounted for
11% of total employment in March 2021.
Business confidence within construction industry
improved in 1Q21, sector outlook is slightly better,
diverging from a worsened macroeconomic
outlook.