Construction & Real Estate
From The Report: Philippines 2014
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From expansion of 18.4% in the last quarter of 2012 to 32% in the first quarter of 2013, the construction industry has shown consistent double-digit growth of late. According to the Philippine Development Plan 2011-16, the government intends to increase infrastructure spending to almost 5% of GDP by 2016. Rapid urbanisation and the pace of construction are likely to add to increasing demand for water, energy, roads, airports, and other transport developments. The outlook for the real estate sector looks positive as demand for quality housing, office and retail space is expected to remain high in step with economic growth. Amidst optimism in the sector, however, there are concerns that increasing property prices could create a bubble and drive up inflation. To some degree, demand-side pressure could be eased as new office and residence projects are completed and more space becomes available throughout the country.
This chapter contains interviews with Don H Lee, President, Lafarge Holdings (Philippines); Michael Cosiquien, Chairman & CEO, Megawide Construction Corporation; and Ambassador Amable R Aguiluz V, Chairman, Picar Development.

Articles from this Chapter

Overview

Building boom: Rising public spending is driving a host of new development projects
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An extraordinary construction boom is transforming the skyline of the national capital, Manila, as well as other provincial cities. What were once rundown neighbourhoods have become chic, and abandoned former US military bases have been transformed into new business districts, catering mainly to the fast-growing outsourcing sector. Work on highways, toll roads, ports and power plants is evident right across the archipelago. SOLID PERFORMANCE: A healthy rate of economic growth – with GDP…

Analysis

Promoting investment: Encouraging foreign entrants and private sector participation is key
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Largely helped by significant public spending in infrastructure, the construction sector saw robust growth in 2013. An improving investment climate, which saw a steady inflow of remittances and inward investments directed at the property sector, also played a part in spurring construction activity. Investment-grade upgrades from Fitch Ratings and Standard & Poor’s continue to make the country an attractive investment destination. In 2013 the Asian Development Bank said that the outlook…

Interview

OBG talks to Don Lee, President, Lafarge Holdings (Philippines)
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Interview:Don Lee What measures could further accelerate the growth of the cement industry? DON LEE: Total investment in construction, including private, public and public-private partnerships (PPPs), based on industry, was estimated to grow by 10% in 2013 to $28bn, accounting for 6% of gross value added of a total $284bn GDP. At roughly $1bn in construction investment, translating into 1.2m tonnes of cement demand in the Philippines, the market may surpass the 20m tonnes for the first time…

Interview

OBG talks to Michael Cosiquien, Chairman & CEO, Megawide Construction Corporation
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Interview:Michael Cosiquien How can public-private partnerships (PPPs) help expand the construction industry? MICHAEL COSIQUIEN: We see PPPs as balancers. Through PPPs, the construction industry is able to balance business with the continued improvement and application of engineering and construction competencies. Right now, the building sector has the biggest concentration of PPPs. These projects cater to all types of economic segments and they benefit everyone in the industry, from suppliers…

Overview

Riding the wave: Demand for housing and office space is expected to remain strong
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Cities across the Philippines are getting a facelift, with gleaming new buildings springing up all around Metro Manila and beyond. With the country riding high on a wave of investment rating upgrades this growth, as far as the real estate and construction sector is concerned, has only just begun. But while this vote of confidence in the Philippines’ economy has been critical to the growth of the real estate sector, serious doubts remain concerning its long-term momentum. DEMAND DRIVERS:…

Interview

OBG talks to Ambassador Amable Aguiluz V, Chairman, Picar Development
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Interview:Ambassador Amable Aguiluz V What segments of the economy will be generating the greatest activity for the sector? AMABLE AGUILUZ: The current economic momentum has generated optimism for real estate developers. Even as newcomers enter a market composed of strong consolidated players, room for expansion in residential and commercial sectors remains substantial, driven by the growing economy, resilient overseas foreign workers’ remittances and an expanding business process outsourcing…

Analysis

Building the future: With rocketing demand for property, vacancy levels should remain low
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Demand for housing and office space in the Philippines is expected to remain high on the back of impressive economic growth. Despite an increase in new space, property developers expect vacancies in premium residential and office space across business districts to remain scarce. According to Colliers International, demand is so high that even with new projects coming on-line vacancy levels in prime districts should remain below 5% for the next two years. Government growth forecasts see GDP…