TABLE OF CONTENTS
The Lerato Tower 3Makati City
MARKET SUMMARY 1
The Philippine Economy 1
Foreign Direct Investments 2
Philippine Construction 3
CONSTRUCTION MARKET ACTIVITY 4
Construction Market 5 Activity Cycle
COMMODITY PRICE TRENDS 6
Metal Prices 6
Steel Reinforcements 6
Crude Oil Prices 6
MATERIAL PRICE TRENDS 7
Retail Price Index 7
Currency Exchange Rates 7
CONSTRUCTION PRICES 8
PROFESSIONAL SERVICES 9
1Rider Levett Bucknall | Construction Market Quarterly Update 2018 Second Quarter
The Philippine economy grew by 6.8 percent in the first quarter of 2018. This was faster than the growth recorded in the same quarter of 2017.
Manufacturing, Other Services, and Trade were the main drivers of growth for the quarter. Among the major economic sectors, Industry recorded the fastest growth at 7.9 percent. This was followed by Services with a growth of 7.0 percent. Agriculture also grew at a slower pace of 1.5 percent.
Net Primary Income increased to 4.3 percent during the quarter. Meanwhile, Gross National Income (GNI) posted a growth of 6.4 percent, faster than previous year’s growth of 6.3 percent.
With the country’s projected population reaching 105.8 million in the first quarter of 2018, per capita GDP grew by 5.1 percent. Meanwhile, per capita GNI and per capita Household Final Consumption Expenditure grew by 4.7 percent and 4.0 percent, respectively.
Philippine Economy Grows by 6.8% in Q1 2018
GROSS DOMESTIC PRODUCTYear-on-Year Growth Rates (%), Q1 2016-2017 and Q1 2017-2018
MARKET SUMMARYTHE PHILIPPINE ECONOMY
PHILIPPINES IN FIGURES
Population 105.8M
(as of First Quarter 2018)
Gross National Income 6.40%
(as of First Quarter 2018)
Gross Domestic Product 6.80%
(as of First Quarter 2018)
Inflation Rate 4.50%
(as of April 2018)
Total Exports $5.51B
(as of March 2018)
Total Imports $8.12B
(as of March 2018)
Balance of Trade $-2.61B
(as of March 2018)
Employment Rate 94.50%
(as of April 2018)
Unemployment Rate 5.50%
(as of April 2018)
Underemployment Rate 17.0%
(as of April 2018)
Labor Force 60.90%
Participation Rate
(as of April 2018)Data source: PSA
Data source: PSA
0
1
2
3
4
5
6
7
8
6.7 6.56.8
Q1 2016 Q1 2017 Q1 2018Q1 2018
2 Construction Market Quarterly Update 2018 Second Quarter | Rider Levett Bucknall
MARKET SUMMARYFOREIGN DIRECT INVESTMENTS
Total foreign investments (FI) approved in the first quarter of 2018 by the seven investment promotion agencies (IPAs), namely: Board of Investments (BOI), Clark Development Corporation (CDC), Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority (SBMA) as well as the Authority of the Freeport Area of Bataan (AFAB), BOI-Autonomous Region of Muslim Mindanao (BOI-ARMM), and Cagayan Economic Zone Authority (CEZA) amounted to PhP 14.2 billion. This was 37.9 percent lower compared with the PhP 22.9 billion approved in the same period last year.
Among the top investing counries, during the quarter, Japan topped with PhP 7.9 billion accounting for 55.3 percent of the total FI commitments. United Kingdom and Netherlands came in second and third pledging PhP 1.5 billion and Php 878.5 million, or 10.9 percent and 6.2 percent of the total approved FI, respectively.
Manufacturing bested all other industries as it stands to receive 64.1 percent of total FI pledges or PhP 9.1 billion. Administrative and Support Service Activities came in second with investment commitments valued at PhP 1.80 billion, or 12.7 percent of the total FI. Real Estate Activities followed with PhP 1.81 billion, or 12.6 percent of the total FI.
In terms of location, majority of the approved foreign investments in the first quarter of 2018 would be intended to finance projects in CALABARZON amounting to PhP 7.4 billion or 52.0 percent. This was followed by the National Capital Region with PhP 3.2 billion or 22.5 percent, and Northern Mindanao with PhP 1.6 billion or 11.5 percent.
Approved investments of foreign and Filipino nationals in the first quarter of 2018 grew by 52.3 percent, nearly PhP 185.0 billion from PhP 121.5 billion in the same period last year. Filipino nationals shared PhP 170.8 billion worth of investments pledges or 92.3 percent of the total approved investments during the quarter.
Foreign and Filipino projects approved by the seven IPAs in the first quarter of 2018 are expected to generate 33,704 jobs. This is 38.4 percent lower compared with previous year’s projected employment. Out of these anticipated jobs, 66.9 percent or 22,535 jobs would come from projects with foreign interest.
Committed FI Reached P14.2B in Q1 2018
TOTAL APPROVED FOREIGN INVESTMENT BY COUNTRY
OF INVESTORFirst Quarter 2018
TOTAL APPROVED FOREIGN INVESTMENT BY INDUSTRY
First Quarter 2018
Data source: PSA
Data source: PSA
Japan 55.3%
UK
10.9%
Netherlands
6.2%
Singapore 4.0%
USA
3.9%
China (PROC) 3.0%
South Korea 2.8%
Australia
2.3%
Taiwan
2.2%
Manufacturing 64.1%
Admin and Support 12.7%
Real Estate
12.6%
3Rider Levett Bucknall | Construction Market Quarterly Update 2018 Second Quarter
Construction Industry Grows by 9.3%
MARKET SUMMARYPHILIPPINE CONSTRUCTION
Construction activities in the country rose by 2.60 percent in the first quarter of the year according to the preliminary data released by the Philippine Statistics Authority (PSA). Total number of constructions reached 36,002 during the quarter compared to 35,101 recorded in the same period in 2017.
The surge in construction activities was driven by higher building permits approved from non-residential construction and additions to existing structures. Non-residential buildings climbed by 11.8 percent from 4,997 last year to 5,587 this year. The growth was brought about by the increase in number of constructions of the following: commercial buildings recorded 20.2 percent; and institutional buildings with 13.3 percent. Moreover, combined number of alterations and repairs of existing structures increased by 23.1 percent from 3,055 recorded last year to 3,760 this year.
Construction Activities Rose by 2.6%
On the other hand, residential construction projects declined by 1.2 percent to 25,632 from 25,670 reported during the same period in 2017. The following residential projects showed decrements in number: single-type houses posted 1.0 percent and apartment/accessoria with 4.9 percent.
The Construction industry grew by 9.3 percent in the first quarter of 2018 with increases posted by both Private Construction and Public Construction. The growth was slower compared with the 9.7 percent growth recorded in the previous year.
Investments in Construction grew by 10.1 percent in the first quarter of 2018, albeit slower compared with the 11.3 percent growth in the previous year. Public
Construction, which accounted for 20.8 percent of total construction investments, expanded by 25.1 percent. Moreover, Private Construction, which accounted for 79.2 percent, grew by 6.8 percent. This was slower compared with the 13.6 percent growth in 2017.
Gross Value Added (GVA) refers to the total payment to factors of production, namely: wages, interest, profits and rents. It also includes capital consumption allowance and indirect taxes. It is also estimated by deducting from gross value of output the sum of non-factor cost such as raw materials and supplies, containers and packing materials, fuel, advertising and other non-industrial overhead cost.
GROSS VALUE ADDED IN CONSTRUCTION
Q1 2015 - Q1 2018 at Constant 2000 Prices, in Percentage
NUMBER OF CONSTRUCTION PROJECTS BY TYPE
First Quarter, Year 2017 and 2018
Q1
2015Q2
2015Q3
2015Q4
2015Q1
2016Q2
2016Q3
2016Q4
2017Q1
2017Q2
2017Q3
2017Q4
2017Q1
2018
Public -13.9 30 54.2 36.4 35.9 31.3 17.6 17.3 2.1 12.2 12.7 21.1 25.1
Private 10.2 10.8 3.3 7.0 7.6 8.7 17.8 4.8 13.6 0.6 0.7 1.7 6.8
GVA 5.1 18.8 9.6 11.6 11.2 11.8 16 9.7 9.7 4.3 4.0 4.3 9.3
Data source: PSA
Data source: PSA
Q4
2017Q3
2017Q2
2017Q1
2017Q4
2016Q3
2016Q2
2016Q1
2016Q4
2015Q3
2015Q2
2015Q1
2015
Public
Private GVA
-20
-10
0
10
20
30
40
50
60
Q1
2018
0
5000
10000
15000
20000
25000
30000
25,362 25,670
5,587 4,997
1,293 1,379
3,760 3,055
Q1 2018 = 36,002
Q1 2017 = 35,101
Residential Non-Residential Additions Alterations andRepairs
4 Construction Market Quarterly Update 2018 Second Quarter | Rider Levett Bucknall
MARKET SUMMARYPHILIPPINE CONSTRUCTION
CONSTRUCTION MARKET ACTIVITY
TOP 5 REGIONS WITH THE HIGHEST NUMBER OF
CONSTRUCTION PROJECTSFirst Quarter 2018
DISTRIBUTION OF CONSTRUCTION PROJECTS BY REGIONFirst Quarter 2018
Region IV-A (CALABARZON) led the list of the top five regions with the highest number of construction projects from January to March 2018. The region recorded 8,199 construction projects or 22.8 percent of the total. Region VII (Central Visayas) ranked second with 4,333 projects or 12.0 percent of the total.
Region III (Central Luzon) ranked third with 3,589 construction projects or equivalent of 10.0 percent of the total, while National Capital Region (NCR) and Region I (Ilocos Region) occupied the fourth and fifth
spots with 2,890 projects or 8.0 percent of the total and 2,762 projects or 7.7 percent of the total, respectively.
Cavite, Cebu, and Batangas led the list of top 10 provinces in terms of the number of construction projects, accounting for 20.3 percent of the total.
The construction projects for the reference period were equivalent to 8.569 million square meters of space and were valued at P101.73 billion.
Data source: PSA
Data source: PSARegion II = 1,040 (2.9%)CAR = 367 (1.0%)
Region I = 2,762 (7.7%)
Region IVA = 8,199 (22.8%)
Region IVB = 837 (2.3%)
Region VI = 2,417 (6.7%)
Region VII = 4,333 (12.0%)
Region IX = 1,137 (3.2%)
ARMM = 58 (0.2%)
Region III = 3,589 (10.0%)
NCR = 2,890 (8.0%)
Region V = 756 (2.1%)
Region VIII = 1,208 (3.4%)
CARAGA = 812 (2.3%)
Region X = 2,341 (6.5%)
Region XI = 2,252 (6.3%)
Region XII = 1,004 (2.8%)
PHILIPPINES = 36,002
0 4000 6000 8000 10000
Region IV-A 8,199
Region VII 4,333
Region III 3,589
NCR 2,890
Region I 2,762
2000
5Rider Levett Bucknall | Construction Market Quarterly Update 2018 Second Quarter
CONSTRUCTION MARKET ACTIVITYCONSTRUCTION MARKET ACTIVITY CYCLE
RLB CONSTRUCTION MARKET ACTIVITY CYCLEFirst Quarter
Activity within the construction industry traditionally has been subject to volatile cyclical fluctuations.
The RLB Construction Sector Activity Cycle represents the construction development activity cycle. The chart below shows the relative level of activity for various sectors of the construction industry in each RLB Philippines’ main and satellite offices in the country.
Each sector is categorised by three positions within the cycle; Peak, Mid and Trough. Within each position, activity is further defined by either declining or growing within that sector.
The “up” and “down” arrows highlight the current status within the three positions of the cycle by means of the three colours identified in the cycle diagram below.
MID
GR
OW
TH
PEAK
TROUGH
DE
CL
INE
KEY CITIES HOUSES APARTMENTS OFFICES INDUSTRIAL RETAIL HOTEL
METRO MANILA
CLARK
SUBIC
LAGUNA
ILOILO
BACOLOD
BOHOL
CEBU
CAGAYAN DE ORO
DAVAO
6 Construction Market Quarterly Update 2018 Second Quarter | Rider Levett Bucknall
COMMODITY PRICE TRENDS
METAL APR2017
MAY2017
JUN2017
JUL2017
AUG2017
SEP2017
OCT2017
NOV2017
DEC2017
JAN2018
FEB2018
MAR2018
APR2018
Copper 5,684 5,600 5,720 5,985 6,486 6,577 6,808 6,827 6,834 7,066 7,007 6,799 6,852
Aluminum 1,921 1,913 1,885 1,903 2,030 2,096 2,131 2,097 2,080 2,210 2,182 2,069 2,255
Steel 657 646 635 635 658 689 677 673 689 717 750 DATA NOT AVAILABLE
DATA NOT AVAILABLE
METAL APR2017
MAY2017
JUN2017
JUL2017
AUG2017
SEP2017
OCT2017
NOV2017
DEC2017
JAN2018
FEB2018
MAR2018
APR2018
Rebar 502 497 498 509 530 579 581 576 598 616 632 DATA NOT AVAILABLE
DATA NOT AVAILABLE
METAL APR2017
MAY2017
JUN2017
JUL2017
AUG2017
SEP2017
OCT2017
NOV2017
DEC2017
JAN2018
FEB2018
MAR2018
APR2018
Crude Oil 52.2 49.9 46.2 47.7 49.9 53 54.9 59.9 61.2 66.2 63.5 64.2 68.8
METAL PRICESApril 2017 - April 2018
Data Source: World Bank and MEPS
STEEL REINFORCEMENTSApril 2017 - April 2018
Description: Rebar (conrete reinforcing bars) (Japan) producers’ export contracts (3 to 12 months terms) fob mainly to Asia, US Dollars per Tonne.
CRUDE OIL PRICESApril 2017 - April 2018
Description: Crude Oil (petroleum), simple average of three spot prices; Dated Brent, West Texas Intermediate, and the Dubai Fateh, US Dollars per Barrel
METAL PRICES
STEEL REINFORCEMENTS
CRUDE OIL PRICES
0
1000
2000
3000
4000
5000
6000
7000
8000
400
500
600
700
800
40
50
60
70
80
7Rider Levett Bucknall | Construction Market Quarterly Update 2018 Second Quarter
MATERIAL PRICE TRENDS
MATERIALS APR2017
MAY2017
JUN2017
JUL2017
AUG2017
SEP2017
OCT2017
NOV2017
DEC2017
JAN2018
FEB2018
MAR2018
APRIL2018
Carpentry 157.2 157.2 157.2 157.2 158.1 158.5 158.6 159.0 159.1 159.3 159.5 161.3 162.8
Electrical 209.0 208.9 208.9 209.0 209.7 210.3 209.8 211.0 211.1 211.2 210.9 211.3 211.7
Masonry 195.5 195.4 195.4 198.2 199.1 199.4 199.0 199.5 199.5 200.1 200.3 201.0 201.5
Painting 189.0 189.0 189.5 189.9 191.0 191.0 191.0 190.9 190.7 191.0 191.1 191.8 191.9
Plumbing 169.7 169.7 169.5 169.8 169.7 169.9 170.3 170.4 170.6 170.9 170.5 171.5 172.0
Tinsmithry 146.0 146.3 146.3 146.3 146.7 146.7 146.7 147.1 147.2 147.5 147.9 148.0 148.2
Miscellaneous 289.7 289.8 292.6 295.1 298.8 301.5 304.7 307.6 310.9 312.2 312.9 313.9 313.3
CURRENCYUNITS PER USD
UNIT APR2017
MAY2017
JUN2017
JUL2017
AUG2017
SEP2017
OCT2017
NOV2017
DEC2017
JAN2018
FEB2018
MAR2018
APR2018
PhilippinePeso ₱ 1 49.7 49.87 50.47 50.58 51.17 51.07 51.80 50.37 49.92 51.42 52.03 52.20 52.00
SingaporeDollar $ 1 1.4 1.38 1.38 1.36 1.36 1.36 1.36 1.35 1.34 1.31 1.33 1.31 1.32
UK PoundSterling £ 1 1.29 1.28 1.3 1.31 1.29 1.33 1.32 1.34 1.35 1.42 1.40 1.41 1.37
AustralianDollar $ 1 0.75 0.75 0.77 0.8 0.79 0.78 0.77 0.76 0.78 0.81 0.80 0.80 0.80
CanadianDollar $ 1 1.37 1.35 1.30 1.25 1.25 1.25 1.29 1.29 1.26 1.23 1.30 1.30 1.28
JapaneseYen ¥ 1 111.25 110.95 111.94 110.55 110.5 112.66 113.15 112.00 112.90 108.84 107.32 106.19 109.31
Korean Won ₱ 1 1,130.10 1,123.90 1,139.60 1,119.10 1,122.80 1,146.70 1,125.00 1,082.40 1,071.40 1,071.50 1,071.00 1,066.50 1,076.20
ThailandBaht ₱ 1 34.62 34.08 33.98 33.31 33.21 33.37 33.22 32.62 32.66 31.36 31.46 31.22 31.51
NetherlandsEuro ₱ 1 1.09 1.12 1.14 1.17 1.18 1.18 1.16 1.18 1.20 1.25 1.22 1.23 1.21
RETAIL PRICE INDEX OF SELECTED CONSTRUCTION MATERIALS IN THE NATIONAL CAPITAL REGION
April 2017 - April 2018
Data Source: PSA
RETAIL PRICE INDEX
CURRENCY EXCHANGE RATES
Data source: IMF
100
150
200
250
300
350
8 Construction Market Quarterly Update 2018 Second Quarter | Rider Levett Bucknall
DEVELOPMENT TYPE LOW HIGH
OFFICE TOWERS PHP/m2
10 - 35 Storeys (NCR) 37,100 54,700
10 - 35 Storeys (Province) 27,700 34,600
OFFICE FIT-OUT
OPEN PLANNED PHP/m2
Computer Areas 18,100 20,900
Executive Areas and Front of House
32,800 37,800
Insurance Office, Government Departments
18,100 20,900
Major Company Headquarters 27,100 31,400
Solicitors, Financiers 27,100 31,400
OFFICE FIT-OUT
FULLY PARTITIONED PHP/m2
Computer Areas 21,500 25,000
Executive Areas and Front of House
38,600 44,400
Insurance Office, Government Departments
21,500 25,000
Major Company Headquarters 33,100 38,100
Solicitors, Financiers 27,100 33,100
OFFICE REFURBISHMENT PHP/m2
Office Typical Floor 42,600 49,000
Office Core Upgrade (excluding life Modernization)
32,700 38,600
WORKSTATION PHP/ea
Call Centre 42,200 48,500
Executive 131,000 151,000
Secretarial 60,300 69,300
Technical Staff 82,700 95,100
DEVELOPMENT TYPE LOW HIGH
RESIDENTIAL PHP/m2
Hi-End Residential Building 38,700 71,600
Mid-End Residential Building 31,600 47,800
Low-End Residential Building 30,600 36,700
Rowhouse ( 1 - 4 storeys) 42,100 49,900
Duplex 29,700 39,400
Single Detached 35,000 62,400
CLUBHOUSE PHP/m2
Clubhouse (Premier) 136,000 307,000
Clubhouse (Secondary) 54,200 71,700
HOTEL FIT-OUT PHP/Room
Three Star 2,930,000 3,250,000
Four Star 4,170,000 4,800,000
Five Star 5,880,000 6,480,000
HOTELS incl. FF&E PHP/m2
Five (5) Star 85,000 100,000
Villas 112,000 148,000
RETAIL PHP/m2
Retail Strip (NCR) 50,000 66,200
Shopping Malls (NCR) 38,400 69,400
Shopping Malls (Province) 31,300 56,500
INSTITUTIONAL PHP/m2
Schools 40,500 49,600
Hospitals with FF&E 36,700 55,500
INDUSTRIAL PHP/m2
Commissary 52,700 67,300
BPO PHP/m2
With Fit-out Works 37,700 53,200
Without Fit-out Works 28,100 47,600
CONSTRUCTION PRICES
9Rider Levett Bucknall | Construction Market Quarterly Update 2018 Second Quarter
PROFESSIONAL SERVICES
QUANTITY SURVEYING
¥ Full Quantity Surveying from start of project to finish¥ Budgetary Estimates and Cost Estimate Preparation¥ Preparation of Priced Bills of Quantities¥ Bid Documentation, Bidding and Award of Contracts¥ Contract Documentation and Administration¥ Project Cost Control¥ Financial, Physical and Quality Audit of Construction¥ Contractual Advice¥ Contractual Claims Preparation and Adjudication¥ Dispute Management¥ Builders Quantities Preparation¥ Replacement Cost Estimates¥ Assistance in Arbitration, and/or Litigation¥ Secondment of Staff
PROJECT MANAGEMENT / CONSTRUCTION MANAGEMENT
¥ Project / Construction Management and Supervision¥ Value Engineering Services¥ Project Close-out Services¥ Quality Assurance and Quality Control (QA/QC) Services
SPECIAL SERVICES
¥ Financial Audit of Construction¥ Physical Audit of Construction¥ Quality Audit of Construction¥ Verification of Loan Amounts¥ Verification of Monies Spent¥ Contractual Advice¥ Contractual Claims Preparation and Adjudication¥ Builders Quantities Preparation¥ Replacement Cost Estimates after Disaster; Fire; Typhoon etc.¥ Expert Witness in Arbitration, and/or Litigation¥ Secondment of Staff
Disclaimer: While Rider Levett Bucknall Philippines, Inc. has endeavoured to ensure the accuracy of the information and materials (the “Materials”)
herein, it does not warrant its accuracy, adequacy, completeness or reasonableness and expressly disclaims liability for any errors in, or omissions
therefrom. Rider Levett Bucknall Philippines, Inc. shall not be liable for any damages, loss or expense whatsoever arising out of or in connection
with the use or reliance on the Materials. The Materials are provided for general information only. Professional advice should be obtained for your
particular factual situation before making any decision. The Materials may not, in any medium, be reproduced, published, adapted, altered or
otherwise used in whole or in part in any manner without the prior written consent of Rider Levett Bucknall Philippines, Inc.
MAIN OFFICE:Building 3, Corazon Clemeña Compound, No. 54 Danny Floro Street, Bagong Ilog, Pasig City, 1600 PhilippinesT: +63 2 687 1075 / 470 0642 F: 570 4025E:[email protected]; [email protected]
STA. ROSA, LAGUNA OFFICE:Unit 201, Brain Train Center, Lot 11 Block 3, Sta. Rosa Business Park, Greenfield, Brgy. Don Jose, Sta. Rosa City, Laguna, 4026 Philippines M: + 63 922 806 7507E: [email protected]
CEBU OFFICE:Suite 602, PDI Condominium, Archbishop Reyes Ave. corner J. Panis Street, Banilad,Cebu City, 6014 PhilippinesT: +63 32 268 0072 E:[email protected]
DAVAO OFFICE:6th Floor, Units 15 & 19, Metro Lifestyle Complex Corner F. Torres Street & E. Jacinto ExtensionDavao City, 8000 Philippines T: +63 82 222 5315 M: +63 917 550 7013E: [email protected]
CAGAYAN DE ORO OFFICE:Rm. 702, 7th Floor, TTK Tower, Don Apolinar Velez Street, Bgy. 19 Cagayan De Oro City, 9000 PhilippinesT: +63 88 850 4105 M: +63 917 860 0207 E: [email protected]; [email protected]
BACOLOD OFFICE:2nd Floor, Mayfair Plaza,Lacson cor. 12th Street, Bacolod CityNegros Occidental, 6100 PhilippinesT: +63 34 432 1344 E:[email protected] BOHOL OFFICE:Cascajo, Panglao Island, Bohol, 6340 PhilippinesT: +63 977 852 9548E:[email protected]
ILOILO OFFICE:2nd Floor (Door 21), Uy Bico Building, Yulo Street, Iloilo City Proper, Iloilo, 5000 PhilippinesT: +63 33 320 0945E:[email protected]
SUBIC OFFICE:The Venue Bldg. Unit 418, Lot C-5, Commercial Area, Subic Bay Gateway Park, Phase 1, Subic Bay Freeport Zone, ZambalesM: +63 917 517 3962
CLARK OFFICE:Units 202-203 Baronesa Place Bldg., Mc Arthur Hi-way Dau, Mabalacat City, PampangaM: +63 918 965 3891
A Quarterly Publication from the Research and Development of:
Rider Levett Bucknall Philippines, Inc.