Building activity sharply contracted in September as the number of approved construction permits plunged 25 percent to 11,746, Philippine Statistics Authority data showed, signaling mounting investor unease amid the ongoing flood-control controversy affecting several growth corridors.
The drop is a steep reversal from August, when construction declined only 0.6 percent, underscoring how quickly sentiment has deteriorated.
Residential projects—long the sector’s backbone—absorbed the sharpest blow. Approvals plunged 31 percent year on year to 7,209, with single-detached homes making up 6,131 of the total. The slump reflects not only tighter household budgets but also the chill cast over the industry after President Ferdinand Marcos Jr. ordered a sweeping crackdown on corruption in infrastructure projects, rattling builders and lenders alike.
Non-residential projects also fell, though less sharply. Approvals dropped 15.4 percent to 2,782, driven by a slowdown in commercial-building applications, which numbered 1,808 and made up almost two-thirds of the segment.
Some categories offered a rare glimmer of resilience. “Other constructions”—typically smaller, specialized structures—rose 22 percent. But additions to existing buildings and alteration-and-repair works both declined, down 23 percent and 18 percent, respectively, suggesting developers are holding back even on upgrades.
The value of construction projects likewise tumbled. Total project value fell 16 percent to P45.14 billion from P53.78 billion a year earlier. Residential construction value dropped 14 percent to P19.94 billion, with single-detached homes contributing P11.32 billion. Non-residential construction value slid a harsher 24 percent to P19.03 billion, dragged by a slowdown in institutional buildings despite still topping the segment at P7.57 billion.
With the construction sector historically a bellwether of economic confidence, analysts warn that continued uncertainty over flood-control plans could prolong the slump unless policy clarity is restored soon.
