Philippine Construction Industry: Paving the way for better infrastructure
The Philippine construction industry is considered as one the most important sectors that contribute significantly to the country’s GDP; bring in huge amounts of investment and foreign exchange; and generate hundreds of thousands of jobs. Most importantly, the construction industry serves as a critical unit for the country’s domestic infrastructure development.
Studies by multi-lateral development institutions such as the World Bank and the Asian Development Bank have pointed out that sound infrastructure is the hallmark in a country’s economic growth, development and above all competitiveness. It generates direct impact on:
Labor productivity and efficiency
Reduction in cost of products and ultimately inflation
Increase in local and global market opportunities, and finally
Alleviation of income inequality and poverty.
Some of the significant contributions of the construction industry in the Philippines’ economy include:
An increased share in Gross Domestic Product (GDP) of the country – for the past 40 years, the construction industry has been contributing 5% of the total output on average. In spite of the global recession, the industry remained intact and showed a positive growth of 10% in 2009, while many other industries had contracted. GDP from construction industry in 2nd quarter of 2017 has reached an all-time high value of approx. 240,000 million PHP.
Considerable contribution in bringing local and foreign investments – The industry has created more than 40% of the total investments.
Modest Foreign exchange earnings – The industry has been attracting a rising trend of more than $100 million foreign exchange remittance per year, except for the year 2008, recording only a $87.5 million. In August 2017, country’s total forex reserves have reached up to $81.5 billion.
Substantial employment opportunities –the industry is employing at least 3.3 million workers till today and it is expected to be increased up to 5.8 million workers.
President Rodrigo Duterte's 'build, build, build' infrastructure plan having a budget of approximately PHP8trn (USD179bn) will initiate greater volumes of construction activity through and beyond 2020 and even 2022, by the end of his first term.
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