Construction activity lost momentum in May as fewer projects secured permits, signaling a softer pipeline for the property and infrastructure sector despite resilient spending on residential developments.
Data from the Philippine Statistics Authority showed approved building permits fell 12 percent year on year to 15,436 in May, extending April’s 1 percent decline and pointing to more cautious construction activity amid elevated financing costs and slower private investment.
Residential projects, which accounted for nearly two-thirds of all approved permits, dropped 16 percent to 10,154, with single-detached houses making up 86 percent of the total. Non-residential permits also weakened, slipping 6 percent to 3,052, led by commercial buildings.
The decline in project approvals contrasted with a relatively modest drop in construction value, suggesting developers continue to pursue larger or higher-cost projects despite fewer groundbreaking plans.
The total value of approved construction eased just 1 percent to P47.05 billion. Residential projects bucked the broader trend, rising 1 percent to P24.73 billion and accounting for 53 percent of total construction value, while non-residential projects fell 5 percent to P17.94 billion.
Total approved floor area also shrank 8 percent to 3.37 million square meters, reflecting declines in both residential and commercial developments.
The figures suggest the property sector remains in a period of adjustment. Higher borrowing costs and cautious investment sentiment appear to be weighing on new project launches, even as developers continue to invest in higher-value residential projects where demand remains relatively firm.
Residential buildings remained the most expensive to construct, with an average cost of P14,082 per square meter. Residential condominiums posted the highest average construction cost at P18,656 per square meter, while institutional buildings led the non-residential category at P16,771 per square meter.
The latest data indicate that while construction has yet to regain broad-based momentum, developers are prioritizing quality and value over volume as the sector navigates a slower investment cycle.
