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We Need More Builders

We need more builders to sustain the rapid growth of the real-estate sector and the general economy.


Based on insights from construction industry players, the Philippines is experiencing a shortage of skilled laborers in the construction sector, as the government stepped up infrastructure spending in the second half of 2019 and the private sector continued the rapid development of office and residential projects across the country.


Construction companies are looking for thousands of workers, including project engineers, foremen, mason, carpenters, machine operators, plumbers, electricians and painters. I have learned that many companies are having a hard time filling the vacant positions despite the above-minimum wage they are offering.


While this is a problem for the industry, it speaks of the vibrant economic activities happening across the country. Data from the Department of Budget and Management (DBM) show that public spending on infrastructure projects climbed 54 percent in September 2019 to more than P100 billion, from just P65.2 billion in the same month of 2018.


It also marked the fastest growth for infrastructure spending in the first nine months of 2019, which proves that the government is keen on pursuing its “Build, Build, Build” program.


The Philippine Statistics Authority (PSA) reported that the gross domestic product rebounded with a 6.2-percent growth in the third quarter of 2019, and one major driver is the construction industry.


“The construction industry expanded by 16.3 percent in the third quarter of 2019. This expansion was attributed to the faster growth in private construction, and growth in public construction albeit slower than the previous year,” the PSA said.


On the expenditure side of the National Income Accounts, construction investments picked up by 17.3 percent in the third quarter of 2019, faster than the 13.3-percent expansion recorded in the previous year. The PSA said private construction, which accounted for 79.6 percent of total construction investments, expanded 19.1 percent. Public construction also grew 11 percent.


The private sector’s strong need for construction workers is not expected to dissipate anytime soon as companies are planning to build more projects. The PSA said the building permits issued by the local building officials nationwide reached 43,394 in the second quarter of 2019 alone, up 8 percent from 40,182 permits approved a year earlier.


By type of construction, residential permits reported the highest number at 32,077, or 73.9 percent of the total in the second quarter and representing a 10.4-percent increase from a year ago. The number of applications for nonresidential constructions hit 5,966, up 5.7 percent from 5,644 nonresidential constructions recorded in the same period of 2018.


The growth is clear in terms of construction value. The PSA said the total value of constructions were estimated at P123 billion in the second quarter, up 21.6 percent from P101.2 billion registered in the second quarter of 2018.


Such a strong growth in construction applications in the second quarter was a continuation of the industry’s robust performance in 2018 when the total number of constructions from approved building permits reached 173,193, up 3.9 percent from 152,012 constructions in 2017.


“In 2018, the total value of construction was estimated at P476.0 billion, higher by 42.9 percent compared with the P333.2 billion reported during the previous year,” the PSA said.


Real-estate consultants attest to the sustained growth of the real-estate sector. Colliers International Philippines estimated that the total office space stock in Metro Manila increased 10 percent to 11.7 million square meters (sq m) as of the third quarter of 2019 from a year earlier.


Colliers predicts that with more office space towers rising in the central business districts of Makati, Fort Bonifacio, Ortigas Center, the Bay Area, Alabang and Quezon City, the total office space stock in Metro Manila would reach 15.164 million sq m by 2022. That would translate into additional hundreds of skyscrapers redefining our skyline in the next three years.


Such forecast hinges on the ability of the government, and the private sector to find and train more Filipinos to become skilled builders who are ready to fortify the foundation of our future economic growth.