APPROVED building permits fell 9.2% in the fourth quarter with inflation dampening construction spending, the Philippine Statistics Authority (PSA) said on Wednesday.
According to preliminary data, the PSA said building projects covered by the permits numbered 37,329 in the fourth quarter. These projects covered 8.43 million square meters (sq.m.) of floor area valued at P98.23 billion.
The contraction represents a turnaround from the gains of 20.4% and 13.6% posted in the previous quarter and the fourth quarter of 2021, respectively.
“Increased prices of building materials likely deterred potential developers, reducing the applications for building permits,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in an e-mail.
Headline inflation during the three months to December accelerated to 8.1%, the highest level since the Global Financial Crisis in November 2008.
Permits for residential projects, which accounted for 70.9% of the total, fell 12% to 26,483. These projects were valued at P47.85 billion with a combined floor area of 4.42 million sq.m.
Single homes made up 85.1% of the residential category. Approved permits here declined 10.4% to 22,529. Apartments and residential buildings declined 22.8% (to 3,478) and 60% (to 10), respectively.
Approved applications for duplex or quadruplex homes, meanwhile, rose 8% to 420 permits.
Permits for other residential projects tallied 46, up 64.3%.
Non-residential projects accounted for 7,175 approvals during the fourth quarter, up 12.9%. These projects were valued at P41.29 with a combined floor area of 3.90 million sq.m.
Commercial construction, which accounted for 70.5% of non-residential projects, rose 20.5% to 5,056 building permits while industrial projects rose 3.9% to 565.
The Calabarzon region — composed of the provinces of Cavite, Laguna, Batangas, Rizal, and Quezon — accounted for 24.3% of all approved building permits in the fourth quarter with 9,069, followed by Central Visayas with 11.3% or 4,235 and Central Luzon with 10.9% or 4,058.
By value, construction projects in the National Capital Region amounted to P19.052 billion, followed by Calabarzon with P17.672 billion, and Central Luzon with P12.840 billion.
Mr. Roces said that construction costs in the first quarter may continue to rise, but will moderate over the remainder of the year.
“Elevated policy rates may also have tempered the appetite for building permits and these likely will remain flat until rate cuts take place,” Mr. Roces added.
The Bangko Sentral ng Pilipinas paused its key policy rate at 6.25 for two consecutive meetings, after hiking a total of 425 basis points between May 2022 and March 2023. — Mariedel Irish U. Catilogo