Both the number and value of construction projects covered by approved building permits declined in July, according to data from the Philippine Statistics Authority (PSA).
PSA said a total of 15,890 building permits worth P47.22 billion were recorded during the month, lower by 1.2 percent and 0.9 percent, respectively, from July 2025.
This compares with 16,079 approved building permits valued at P47.66 billion in the same month last year.
Residential buildings accounted for the bulk of approved permits at 9,805, or 61.7 percent of the total.
Single-type houses comprised 8,274 permits, accounting for 84.4 percent of all residential building permits approved during the month.
In terms of value, residential construction projects increased 2.3 percent to P20.79 billion from P20.33 billion a year earlier.
Meanwhile, non-residential buildings accounted for 3,662 permits, or 23 percent of the total.
Commercial buildings made up the majority of non-residential projects with 2,431 permits, equivalent to 66.4 percent of the category.
Despite the increase in permits, the value of non-residential construction projects declined 7.7 percent to P20.48 billion from P22.20 billion a year earlier.
Philippine Institute for Development Studies (PIDS) economist John Paolo R. Rivera said the decline in construction activity showed the impact of elevated inflation on construction and property costs, making projects and housing relatively less affordable for consumers.
PSA data showed the average construction cost increased 3.5 percent to P11,995.74 per square meter in July from P11,591.69 a year earlier.
Condominium buildings posted the highest average cost among residential projects at P16,319.96 per square meter, while institutional buildings had the highest average cost among non-residential projects at P13,500.07 per square meter.
Rivera said high borrowing costs were also weighing on both consumers and developers, making housing purchases more expensive and raising the cost of financing new projects.
He also pointed to weak business confidence, which could make private firms less inclined to advance new construction projects, further constraining supply.
‘If they don’t release many projects, then the supply remains to be constrained. Demand is also constrained. So that will constitute the decline in the pricing, in volume, in performance of the property market,’ he told reporters.
Rivera also emphasized that weaker construction activity could weigh on overall economic growth as construction contributes to investment spending and economic activity.
‘Compared to the previous years, together with consumption, its construction is actually beefing up the economy,’ he noted.
‘So in this slowdown, it is actually commensurate that its contribution to our economy will also slow down. Slower construction spending will also result to slower economic expansion,’ he added.