Philippine building permits hit over six-year low in August

The number of approved building permits in the Philippines fell to 10,968 in August, the lowest in over six years, as high borrowing costs, economic slowdown and weather disruptions weighed on construction. Residential permits plunged 40.7% year on year, while nonresidential permits fell 6.2%, accor

The number of approved building permits in the Philippines fell to an over six-year low in August, as elevated borrowing costs, slower economic activity and weather disruptions dampened construction activity, analysts said. Preliminary data from the Philippine Statistics Authority showed construction projects covered by permits fell by 31 per cent in August to 10,968 from 15,888 a year earlier. The slump reversed the 8.6 per cent growth seen in August 2025 and the 4 per cent growth in July. This was also the lowest number of approved permits since the 4,725 recorded in May 2020. Month on month, the figure was 34 per cent lower than the 16,725 permits approved in July.

Construction projects covered 2.55 million square metres of floor area in August, down 42.7 per cent from 4.44 million sq m a year earlier. These projects were valued at P39.22 billion, a decline of 38.9 per cent from P64.16 billion in August 2025. Jamie Dela Cruz, a research manager at Savills Philippines, said the sharp decline reflects the cautious stance of developers and property owners towards new construction. “Higher construction costs, financing expenses, and uncertainty over the pace of economic growth can affect project timing and investment decisions,” she said in a Viber message.

Approved permits for residential buildings, which accounted for 57.9 per cent of all projects, plunged 40.7 per cent year on year to 6,355 in August from 10,712. These projects totalled P16.86 billion, down 23.7 per cent from P22.11 billion a year earlier. Single houses, which made up 86.6 per cent of residential construction, fell 33.6 per cent to 5,501, while apartments declined 62.1 per cent to 701 and duplex or quadruplex houses dropped 80.8 per cent to 103. Ms Dela Cruz said the decline may reflect continued challenges in housing affordability and developers being more selective about launching projects.

Nonresidential building projects slid 6.2 per cent year on year to 2,921 in August from 3,114, accounting for 26.6 per cent of total permits. Their total value was P19.35 billion, down 35.2 per cent from P29.87 billion. Commercial buildings, which made up 64.7 per cent of nonresidential permits, saw an 8.4 per cent drop to 1,891. Institutional building projects rose 14.6 per cent to 619, while industrial construction fell 10.9 per cent to 237. Agricultural projects slipped 5.6 per cent to 135, and other nonresidential projects fell 61 per cent to 39.

By region, Calabarzon posted the highest number of approved building permits at 2,283, a 20.8 per cent share, followed by Central Visayas with 1,082 (9.9 per cent) and Central Luzon with 1,014 (9.2 per cent). Colliers Director and Head of Research Joey Roi Bondoc cited rising construction material prices, partly due to the Middle East war, as a major developer concern. Cid L. Terosa, an associate professor at the University of Asia and the Pacific, said high financing costs pushed developers to downsize projects and weakened household demand.

Ser Percival K. Peña-Reyes, a senior research fellow at the Ateneo Center for Economic Research and Development, noted that uncertainty surrounding government infrastructure spending also dragged construction activity in August. Ms Dela Cruz expects construction activity to remain uneven in the near term, with a sustained recovery depending on improved business and consumer confidence, more accessible financing, and greater certainty around economic growth and infrastructure development.