Building permit approvals growth slows to 5.7%

APPROVED building permit applications picked up by 5.7% year on year to 38,263 in the fourth quarter, according to Philippine Statistics Authority.

The growth rate in permit issuances represents a turnaround from the 7.8% contraction from a year earlier, though it eased from the 6.5% growth rate posted in the third quarter of 2021.

The building projects covered by the permits issued during the period were equivalent to 7.915 million square meters (sq.m.) of floor area valued at P90.897 billion. Floor area and value totals were up 21.3% and 24.8%, respectively, from a year earlier.

Permits for residential projects, which accounted for 73.2% of the total, increased by 8.1% to 27,998. These projects were valued at P48.40 billion with a floor area of 4.440 million sq.m.

Single homes made up 82.7% of all residential projects, declining 0.6% year on year to 23,152 permits.

Non-residential projects tallied 5,816 approved construction permits during the period, up 11%.

Commercial construction accounted for 3,831 approved permits (up 18.5%); agricultural, 209 (up 5.0%); and other non-residential, 203 (up 35.3%).

Institutional building permits declined by 0.6% to 1,070, while industrial projects fell by 13% to 503.

Permits for additions to existing structures rose by 91.8% to 1,051 in the fourth quarter, while alteration and repair permits declined by 24.7% to 3,398.

The Calabarzon region — composed of provinces of Cavite, Laguna, Batangas, Rizal, and Quezon — accounted for 25.6% of all approved building permits in the fourth quarter with 9,811, followed by Central Luzon with 14% or 5,371 and Central Visayas with 11.6% or 4,432.

By value, construction projects in the National Capital Region (NCR) amounted to P20.018 billion. This was followed by Calabarzon with P18.788 billion, and Central Luzon with P13.938 billion.

In a text message, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the period’s performance was influenced by the coronavirus surge fueled by the Delta variant and the rising global prices of commodities.

“The slowdown in growth could be attributed to the Delta variant surge that led to tighter restrictions that spilled over until the early part of the fourth quarter,” he said.

“Some pick up in the prices of global commodity prices that led to higher prices of construction materials also partly contributed to the slower growth,” he added.

Metro Manila and nearby provinces were placed under Alert Level 3 in October, in the middle of the strictness range of quarantine settings.

Mr. Ricafort expressed optimism in the growth of construction sector as the economy heads to recovery with Metro Manila and other provinces now under Alert Level 1 — the most permissive quarantine setting.

“Offsetting risk factors include the Russia-Ukraine war that led to higher cost of construction materials amid the sharp increase in oil or energy, metals, and other global commodities that led to higher overall inflation, thereby raising the cost production,” he added.

In February, Russia invaded Ukraine, causing global oil prices to spike on concern over sanctions on Russia, a major energy producer. — Mariedel Irish U. Catilogo