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Private Sector Driving 2015 the

Philippines' Construction Surge

Philippines | Infrastructure | Thu May 07, 2015

BMI View : The Philippines will see strong growth in the construction sector in 2015,
underpinned by residential and non-residential construction amidst stable monetary policy, as
well as efforts by President Aquino Benigno to accelerate public-private partnerships before the
next presidential elections in 2016. However, beyond 2015 growth will slow as a result of rising
political uncertainty ahead of 2016 elections.
We expect the Philippines' construction sector to register double digit real growth in 2015,
expanding by 10.9% in 2015, with growth largely underpinned by the private sector, as the
residential building boom continues to lift construction activity while the government maintains
a relatively stable monetary policy. Public sector building activity will also experience a
moderate recovery, although we expect the recent DAP ruling to put a cap on any upside. Beyond
2015, we expect political uncertainties to weigh on growth, averaging 6.7% annually between
2016 and 2019.
High frequency data supports our view that momentum is building in the construction sector.
Data from the National Statistical Coordination Board (NSCB) illustrates that the construction
sector has recovered from impact of typhoon Yolanda in November 2013, expanding by 21.9%
year-on-year (y-o-y) and 13.2% y-o-y in Q414 and Q314 respectively. This brings real growth of
the construction sector to 10.0% for 2014, with value add (industry value) in construction
coming in at PHP814bn.
Expecting A Strong 2015
Philippines - Construction Industry Value And Growth

Easing Foreign Restrictions a

Boon to the Philippines'
Philippines | Infrastructure | Wed May 20, 2015

The expected easing of foreign ownership restrictions for Philippines' construction sector will
spur foreign investment, given existing interest from companies abroad. In particular, the change
in regulation would benefit the country's Public-Private Partnership (PPP) program and lift
infrastructure growth.

We believe that the expected easing of foreign ownership restrictions in the Philippines'
construction sector will be a boon for the construction sector, providing additional sources of
equity funding. While a recovery in the country's construction sector has largely been driven by
the private sector, we expect public construction to benefit significantly through the PublicPrivate Partnership (PPP) program, posing an upside risk to our outlook for the sector, which we
forecast to grow by an annual average of 6.9% in real terms between 2015 and 2019 ( see
'Private Sector Driving 2015 Construction Surge', May 7).
Foreign Investment Poses Upside Risk
Philippines - Construction Industry Value, PHPbn