APPROVED building permit applications fell 6.4% year on year to 39,638 in the second quarter, against the 6.5% decline in the previous quarter, the Philippine Statistics Authority (PSA) reported on Friday.
Preliminary data from the PSA indicated that the building projects covered by the permits were equivalent to 8.54 million square meters (sq.m.) of floor area valued at P99.60 billion.
“This may mathematically already reflect the normalization of the base effects, as there are no more large lockdowns in 2022 compared to 2020-2021, thereby also consistent with the normalization of base effects as well in other economic data, such as GDP growth,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in an e-mail.
Permits for residential projects, which accounted for 71.7% of the total, declined 5.7% to 28,411. These projects were valued at P49.27 billion with a floor area of 4.40 million sq.m.
Single homes, which accounted for 87% of residential applications, fell 1.2% to 24,727.
Meanwhile, applications for duplex or quadruplex homes increased 50.6% to 533. This was followed by apartment buildings and residential buildings at 3,111 (down 33.6%) and 10 (down 74.4%), respectively.
Other residential applications dropped 3.2% to 30.
Non-residential projects amounted to 6,646 approved permits during the period, up 5.7%.
Commercial construction accounted for 4,584 approvals, up 5.9%; industrial projects 520, up 14.5%; and other non-residential works 175, up 1.2%.
Institutional building permits rose 5.9% to 1,167.
Agricultural projects fell 12.3% to 200.
Permits for additions to existing structures rose 0.1% to 1,244 in 2022, while alteration and repair permits dropped 28.9% to 3,337.
The Calabarzon region — composed of the provinces of Cavite, Laguna, Batangas, Rizal, and Quezon — accounted for 25.4% of all approved building permits in 2022 with 10,071, followed by Central Luzon with 12.9% or 5,122 and Central Visayas with 12.2% or 4,846.
By value, construction projects in the National Capital Region amounted to P21.445 billion. This was followed by Calabarzon with P19.486 billion, and Central Luzon P13.883 billion.
Mr. Ricafort expects the number of approved building permits to rise following the sustained economic recovery but noted, however, that higher inflation and borrowing costs may offset any growth.
“Base effects would already be more normalized especially into 2023, with decent year-on-year growth possible but offset by higher inflation as well as higher interest rates since the aggressive Fed and (BSP) policy rate hikes,” he added.
Since March 2022, the Federal Reserve has raised its key rates by 500 basis points to 5-5.25% in order to contain inflation. — Mariedel Irish U. Catilogo
