The number of constructions in February 2025 based on approved building permits saw a 2.5 percent decline year-on-year due to fewer non-residential construction activities, according to a report released by the Philippine Statistics Authority (PSA) on Tuesday.
The PSA said the number of constructions in the country totaled to 14,440, down from the 14,809 total number of constructions in the same month of the previous year.
The total value of constructions amounted to P41.6 billion, reflecting an annual decline of 16.9 percent from the P50.05 billion posted in February last year.
By type of construction, residential buildings reported the highest number of constructions at 9,223 or 63.9 percent of the total number of constructions during the month.
This saw an increase of 1.2 percent from the same month of the previous year’s level of 9,115 constructions.
The construction value of residential buildings amounted to P17.38 billion or 41.8 percent of the total construction value in February 2025.
This reflects an annual drop of 24.9 percent from the P23.13 billion value of constructions of residential buildings reported in the same month last year.
Non-residential type of construction was the second highest in terms of number of constructions at 3,290 or 22.8 percent of the total number of constructions during the month.
This type of construction decreased during the period at an annual rate of 4.7 percent.
Most of the non-residential constructions were commercial buildings with 2,322 constructions.
The PSA said non-residential building constructions valued at P21.29 billion accounted for more than half of the total value of constructions during the period.
This indicates an annual decrease of 0.5 percent from the P21.39 billion construction value of non-residential buildings recorded in the same month of 2024.
Meanwhile, the addition, which refers to any new construction that increases the height or area of an existing building, alteration and repair of existing structures, and other constructions contributed 532, 1,058 and 337 constructions activities, respectively.
Compared with their respective number of constructions in the same period of the previous year, these types of constructions posted annual declines of 4 percent, 14.2 percent and 25.6 percent, respectively.
In February 2025, the value of constructions for addition stood at P0.56 billion; alteration and repair to existing structures, P2.04 billion; and other constructions, P0.32 billion.
Compared with their respective value of constructions in the same period last year, these types of constructions recorded annual decreases of 44.1 percent, 49.8 percent and 29.2 percent in February 2025, respectively.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said the PSA’s latest report on construction activities still reflects the effect of the Philippine offshore gaming operation (POGO) ban by end-2024 that led to excess supply of residential condos, office spaces and other commercial spaces in POGO clustered areas.
This led to downward adjustments by some property developers in response to increased supply or vacancies after the POGO exit.
Ricafort also cited higher vacancy rates for some residential condo, office spaces and commercial or retail spaces in recent years since the pandemic hit, amid the hybrid work setup which reduced the need for new property development.
“Still relatively higher prices and interest rates over the last two to three years could have also weighed on new construction/building permits,” Ricafort said.
Meanwhile, Reinielle Matt Erece, economist at Oikonomia Advisory & Research Inc., said the slowdown can be attributed to the “waiting” behavior from developers for economic stability and lower borrowing costs.
“In addition, I think the slowdown can also be due to the repositioning of investments amid uncertainty and market mismatch, with what we observed from the condo oversupply,” Erece said.
“I do believe that things will get better for the sector. This is especially as the country’s resiliency become helpful in maintaining the country’s positive growth outlook,” he added.
John Paolo Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the annual decline in approved building permits in February hint at some cooling in the construction and real estate space, but noting it is likely due to a combination of cyclical and structural factors, not just a broad-based slowdown.
“With interest rates still elevated, many developers especially micro, small and medium-sized enterprises and commercial players may be holding off on new projects or expansions. This aligns with the drop in non-residential permits, which tend to be more sensitive to financing conditions,” Rivera said.
“Business sentiment has been somewhat cautious in early 2025 due to global uncertainty (e.g., trade tensions, slower export orders), which may be tempering corporate capital expenditures, including real estate,” he added.
That said, Rivera said this could also be a short-term fluctuation.
“Construction activity tends to be calculated and may reflect timing of project approvals or seasonal adjustments rather than an outright decline in demand. We need to see a consistent pattern over the next couple of quarters to confirm a trend,” Rivera said.
“On the residential side, oversupply in some condo segments may still be working its way through the system, especially in the National Capital Region, which could also be prompting developers to delay new launches,” he added.
