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Wednesday, November 22, 2017 | MANILA, PHILIPPINES
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Date posted: Friday, December 11, 2015 | Manila, Philippines

Construction

Private sector keeps industry humming

2014 WILL GO DOWN in recent history as the year the Philippine government cut back infrastructure spending, nearly spoiling the above-trend economic growth since the start of the Aquino administration.

If not for the private sector, construction would have slumped that year.

EEI Corp. is one such private firm that picked up the slack. A unit of the Yuchengco Group of Companies, EEI enjoyed a prolific year, completing 14 projects. Some of these projects were for top real estate firms, such as SM Development Corp. (ranked 109th in this year’s Top 1000 Corporations) and Megaworld Corp. (32nd).

These projects were not only for residential purposes, but also for the business process outsourcing and tourism industries, lending credence to the high multiplier effect of construction.

EEI also completed two projects in Saudi Arabia through its 49% owned Al Rushaid Construction Co. Ltd.

As a result, EEI’s consolidated revenues increased 67% to P17.58 billion in 2014, the “highest in the history of the company.” Excluding its subsidiaries, EEI, which placed 121st in this year’s Top 1000 Corporations, grew its topline by 62% to P15.87 billion. What’s more, the company still has 23 ongoing projects going into this year.

EEI’s robust growth was a testament to the construction industry’s performance in 2014. Philippine Statistics Authority (PSA) data showed that the sector’s gross value added, or the contribution of a sector to gross domestic product, grew by 9.9% to P422.15 billion, albeit slower than the previous year’s 10.3%.



Nevertheless, construction was one of the country’s fastest growing sectors last year, outpacing real estate, renting and business activities (8.7%) and manufacturing (8.3%).

Public construction started off strong in the year, but lost steam, even contracting by 1.6% in the third quarter. For the year, it grew 6.3%.

Private construction posted a 5.1% decline in the first three months of last year, but gained momentum in the succeeding quarters.

PSA data also showed that construction projects nationwide numbered 126,875 in 2014, up by 5.1% year on year and reversing the contraction of 0.23% the previous year.

The sector’s 22 top earners in this year’s Top 1000 Corporations posted an aggregate gross revenue of P149.04 billion, up 11.05% from the year before.


Leading the way was Ayala construction arm Makati Development Corp. (No. 62) with a gross revenue of P26.93 billion. EEI placed 2nd and overtook D.M. Consunji, Inc. (No. 125), which posted a gross revenue of P15.30 billion (down 8.1%).

Profit-wise, Makati Development also led the pack with P2.27 billion, or 61.4% higher than the P1.41 billion the year before. EEI earned P702 million, up 44% year on year, while D.M Consunji recorded a 93% slump in profit.

Megawide Construction Corp. (No. 213) recorded P10.01 billion in gross revenue, 12.1% lower than the previous year’s P11.39 billion. The same could be said of Daelim Philippines, Inc., which grossed P9.55 billion, or 40% lower than in 2013. Megawide and Daelim both saw their net incomes decline by 40.5% and 60.4%, respectively.

Going forward, construction is expected to get a boost from public spending, as the government rushes to beat an election ban that starts on March 25, 2016.


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*Send e-mail to Leo at lguy@bworldonline.com or follow him on Twitter @leouy037.

 
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