MANILA – The research arm of the Fitch Group has forecast the Philippine construction industry will steadily expand over the next 10 years, with Chinese and Japanese firms largely benefitting from greater investments and project opportunities.
BMI Research sees positive outlook for the construction sector, a year after President Rodrigo Duterte assumed office and launched his P7-trillion (USD137 billion) infrastructure development plan.
“We forecast that the Philippines’ construction industry will steadily expand at an average real rate of 9.8 percent between 2017 and 2026,” it said in a report released on Thursday.
The research unit expects construction, engineering and heavy industry firms from China and Japan benefiting from robust growth in the Philippines’ infrastructure industry.
It said imports of infrastructure-related goods from the two countries continue to be on upward trajectories, noting “we expect this trend to continue to manifest with the number of project opportunities remaining significant.”
The BMI key projects database indicates that USD63 billion worth of planned projects have not yet entered the tendering or contracting phases.
It attributed the trend to Japan’s historical investments and trade relations with the Philippines being bolstered by the former’s infrastructure export strategy.
BMI Research added economic ties with China have expanded significantly since President Duterte announced his push for friendlier relations with Beijing in late 2016.
Many of the Duterte administration’s largest proposed projects, BMI noted, have been converted from public-private partnerships (PPPs) to official-development assistance projects, with the implicit aim of targeting the generous financing packages available from China and Japan.
“We note that switching from developing projects from PPPs to be financed by overseas development assistance threatens locking other international companies from benefitting similarly,” it added.