PH construction to spearhead economic recovery

Local construction players recently expressed optimism that the industry will play a key role in accelerating Philippine economic growth after a challenging 2020.

“Around the world, the construction industry is being seen as one of the catalysts as government pivot from response to economic recovery,” said Wilfredo L. Decena, Philippine Constructors Association (PCA) president, during an online focus group discussion of the infrastructure sector led by the Department of Trade and Industry (DTI).

The PCA is a 75-year-old non-profit organization representing Filipino contractors and construction companies with 1,500 members nationwide.  

“While the construction industry is typically much more volatile than the overall economy, it is crucial to stimulate recovery,” opined Yidan Luo of the young professional, transport, and communications department, Southeast Asian division of the Asian Development Bank.

Need for boost in public spending 

Last year, the construction sector suffered a contraction of 9.8% due to lockdown measures implemented to stem the spread of the pandemic. It has since seen points of recovery with current numbers from the Philippine Statistics Authority (PSA) showing that 4.2 million Filipinos are employed in construction, up from 3.7 million in 2020. Analytics firm Fitch Solutions forecasts that the industry will grow by 9.5% in 2021, expecting the Philippines to effectively contain the spread of the virus.

But in order for recovery to happen, public spending needs to be accelerated according to the participants of the focus group discussion.

In response, Department of Public Works and Highways Undersecretary Cathy Cabral said the government allotted more than P1.0 trillion for infrastructure for 2021.

Changes in construction

Lockdown measures and movement restrictions proved challenging to the construction sector as most people are expected to be on site. Operational adjustments were then introduced to keep the sector running--changes the industry expects to stay even after the pandemic.

“We asked our people to work from home...monitoring was done remotely using 360-degree cameras, and we provided barracks for our workers. Our digital activities were really accelerated...due to COVID-19,” revealed  Robert Jose Castillo, president and CEO of construction firm EEI Corporation, during the discussion on the adjustments introduced by the industry during the pandemic.

The presence of vaccines will help the industry recover though delayed rollouts will delay projects that have been shelved last year even more, added Jorge A. Consunji, president and CEO of D.M. Consunji Inc.

Vaccination priority for construction workers 

Construction workers should also be considered economic frontliners, and be given priority in the government vaccination rollout, industry players said.

Another challenge to the sector’s recovery is the proposal to open the market to foreign players. A Senate bill (S.B. 1809) was filed by Senator Ramon Revilla Jr. on September 2020 seeks to amend the Contractor’s License Law (RA. 4566). The PCA said the proposed amendment to the law that will allow “persons, regardless of nationality or citizenship” properly licensed and registered with proper authorities, to practice construction contracting in the Philippines.

The bill, if made into law will “effectively open the construction industry to foreign contractors without providing any further regulations,” noted Decena.

Unregulated entry of foreign contractors feared

While other countries have taken steps to protect their local industry, some sectors are pushing for the further opening up of the local construction industry. In a position paper submitted to Senate in response to the said bill, Decena said: “the unregulated entry of foreign contractors, especially at this time when the construction industry is bleeding from the COVID-19 pandemic, will adversely affect small and medium-sized Filipino contractors and deprive Filipino workers of job opportunities in their own country”.

The government should instead focus on providing opportunities and growth paths, specially for MSME contractors, including developing the talent capacity of the local workforce to help the recovery and growth of the construction sector, Decena said. 

The global industry local workforce is currently experiencing a skilled workforce shortage exacerbated by the health and safety measures against the pandemic.

The PCA said it introduced capacity-building programs under its Philippine Constructors Academy. These include the internationally-assured Pambansang Treyners ng Konstruksyon and the Construction Supervisors Training program in partnership with the Technical Education and Skills Development Authority (TESDA); the Construction Program Management Masterclasses; and the Procurement Observers Program to train PCA volunteers on the Bids and Awards committee procedures, including the legal aspect, ethics, and integrity of being an observer.