PH builders set for growth with infrastructure spending

Philippine construction companies are expected to experience robust performance in 2025, a year that includes the midterm elections, with analysts predicting that heightened state infrastructure spending will be a key driver.

According to Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., construction firms are poised for growth due to the country’s strong demographic trends and infrastructure preparations leading up to the May 2025 elections. He pointed out that infrastructure projects are expected to accelerate before the Commission on Elections (Comelec) enforces the election-related public works ban.

Ricafort also noted that anticipated rate cuts by the US Federal Reserve could increase demand for loans, benefiting property developers and construction companies.

“Increased government spending on infrastructure will directly support construction companies involved in the supply chain of these national projects,” he said.

State infrastructure expenditure saw a slight increase of 2.52% in October compared to the previous year, as per the Department of Budget and Management.

Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., echoed the optimistic outlook, although he emphasized that profitability would depend on several factors, such as government infrastructure spending, private sector investments, and overall economic conditions.

Arce further highlighted the Philippine government’s ongoing initiatives as a catalyst for demand in the construction sector. However, he also cautioned that growth might face challenges, particularly due to fluctuations in the prices of raw materials like steel and cement, which are affected by global market trends and exchange rate instability.

In terms of corporate performance, Megawide Construction Corp. reported a recovery in the third quarter, posting a net income of P142.7 million, a stark contrast to the P29.85 million loss in the same period last year. Revenue also saw an uptick of 10.9%, reaching P5 billion.

On the other hand, EEI Corp. experienced a setback, reporting a net loss of P31.75 million in the third quarter compared to a net profit of P406 million in the previous year, with revenues down 27.8% to P3.14 billion.

Meanwhile, Phinma Corp., which has a construction materials division, saw a 75.1% decline in net income for the third quarter, posting P144.86 million, despite a 0.5% increase in revenue to P6.61 billion. Gross expenses for the company rose by 2.4%, reaching P5.5 billion.

Despite the challenges, the overall outlook for the sector remains cautiously optimistic, contingent on favorable economic policies and the timely execution of infrastructure projects.