Philippine Construction Sector to Take 9.8% Hit as COVID-19 Continues On

Economic boost from different infrastructure projects this year will not be possible, as Fitch Solutions forecasts that the Philippine construction sector is likely to go down 9.8%, a bleak contrast to government hopes for the infrastructure situation in the country to have positive economic impact.

The think tank attributes the slump to a dismal Q2 performance of the Philippine economy, along with the escalating coronavirus disease 2019 situation in Luzon. The previous projection was a 2.9% growth in the sector.

“We now expect the sector to experience a full-year contraction of 9.8% y-o-y in real terms. This sharp downward revision is underpinned by a dismal Q220 performance, and the escalating Covid-19 pandemic situation in Luzon.” the Fitch Solutions article said.

The Philippine gross domestic product (GDP) shrunk by 16.5% in the second quarter of 2020, with the construction sector taking a huge hit with various infrastructure projects halted as key areas in the country such as Luzon and Cebu in the Visayas region were placed under the strict Enhanced Community Quarantine (ECQ) most of the quarter.

It’s not all bad though, as for 2021, the think tank forecasted for the construction industry to experience 9.5% growth upon the assumption that the country will be successful in curbing the spread of the virus, resulting to the resumption of halted infrastructure projects throughout the country. (GFB)