Construction material prices flat in February

The wholesale price growth rate of construction materials in the National Capital Region (NCR) remained flat in February compared to a year earlier, according to the Philippine Statistics Authority (PSA).

Data showed the construction materials' wholesale price index (CMWPI) posted a zero-percent year-on-year growth last month compared to 0.1 percent in January.

Its annual growth rate in February 2024 was at 1.0 percent.

Main factor for the flat rate was the slower annual increases in the indices of three commodities.

The price index of doors, jambs and steel casement was 0.5 percent in February, lower than the 0.6 percent in the comparable month; electrical works, 0.2 percent from 0.3 percent; and painting works, 1.0 percent from 1.1 percent.

Three commodity groups, on the other hand, had higher annual increases in February compared a month earlier.

The price index of hardware was 0.2 percent from 0.1 percent in January; tileworks, 1.1 percent from 0.8 percent; and plumbing fixtures and accessories/waterworks, 0.8 percent from 0.7 percent.

PVC pipes posted an annual increase of 0.1 percent compared to a 0.1 percent annual decline in January.

On the other hand, there were slower annual declines in the indices of cement at -1.0 percent from -1.1 percent; reinforcing steel, -0.1 percent from -0.3 percent; and fuels and lubricants, -3.3 percent from -3.4 percent.

The indices of the rest of the commodity groups either retained their respective previous month's annual growth rates, or had zero percent annual rates in February, the PSA said.

The CMWPl measures changes in the average wholesale prices of construction materials. It is a variant of the general wholesale price index (GWPI) and is used in the computation of price hikes of construction materials for various government projects.

Source: Manila Times

Open spaces in a subdivision are beyond the commerce of man

In the Philippines, open spaces in a subdivision—such as parks, playgrounds, and roads—are typically beyond the commerce of man, meaning they cannot be sold or privately owned once they are designated as common areas.

Legal Basis:

1. Presidential Decree No. 957 (Subdivision and Condominium Buyers' Protective Decree)

   • Requires developers to allocate at least 30% of the total subdivision area for open spaces, roads, and other community facilities.

   • These open spaces are meant for public or homeowners' association (HOA) use and cannot be sold or used for commercial purposes.

2. Local Government Code of 1991 (Republic Act No. 7160)

   • Upon completion of the subdivision, the roads and open spaces must be turned over to the local government or the HOA for maintenance.

   • If turned over to the local government, these spaces become public domain and cannot be sold.

3. Revised Implementing Rules and Regulations of PD 957

   • Open spaces are considered part of the subdivision’s amenities and should not be converted for private or commercial use unless properly reclassified by authorities.

     
     

Exceptions:

• In some cases, developers or HOAs may petition the Housing and Land Use Regulatory Board (HLURB, now DHSUD) or the local government unit (LGU) for reclassification. If approved, these open spaces might be used differently (e.g., converted into commercial property), but this is rare and subject to strict legal processes.

  
  

Source: Ziggurat Real Estate.

PHL builders to deliver strong results in 2025

Listed Philippine construction companies are expected to deliver strong results in 2025 — an election year — driven by increased state infrastructure spending, analysts said.

“[Construction companies] are set for growth due to the country’s favorable demographics, as well as preparations for the May 2025 midterm elections especially before the election ban,” Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said.

He said infrastructure projects are expected to be expedited before the Commission on Elections (Comelec) enforces a public works ban before the May 2025 elections.

He added that the expected rate cuts by the US Federal Reserve are expected to increase demand for loans from property developers and construction companies.

“Increased government infrastructure spending would benefit construction companies that are part of the supply chain of the various infrastructure projects around the country,” Mr. Ricafort said.

State infrastructure spending rose 2.52% in October from a year earlier, according to data from the Department of Budget and Management.

“Overall, the profitability outlook for 2025 appears cautiously optimistic, contingent on favorable economic policies and the execution of planned projects,” Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said in a Viber message.

He said the profitability of construction and infrastructure companies in 2025 depend on factors such as government infrastructure spending, private sector projects and macroeconomic conditions.

“The Philippine government’s ongoing infrastructure development through different initiatives can stimulate demand for construction services,” he added.

But the growth of the sector is expected to be underpinned by raw material costs including steel and cement, which are influenced by global markets and foreign exchange volatility.

Megawide Construction Corp. returned to profit in the third quarter, posting an attributable net income of P142.7 million from a net loss of P29.85 million a year earlier. Revenue rose 10.9% to P5 billion.

EEI Corp. had an attributable net loss of P31.75 million in the third quarter from an attributable net income of P406 million a year earlier as gross revenue fell 27.8% to P3.14 billion.

Phinma Corp., which has a construction material unit, posted an attributable net income of P144.86 million in the third quarter, 75.1% lower than a year earlier, even as revenue rose 0.5% to P6.61 billion. Gross expense increased by 2.4% to P5.5 billion.

Source: Business World