How COVID-19, Pandemic Hit Construction Companies in the Philippinesadmin
How COVID-19, Pandemic Hit Construction Companies in the Philippines
A Holistic Analysis to Sketch Out Real Estate Outlook In The Time Of Pandemic In Philippine
Since the outbreak of coronavirus, shortly known as COVID-19 and widely as pandemic has is still taking a significant toll on people’s lives every day. It did not stop taking lives; instead, it put the developed countries in economic crisis as a consequence of slump in all the aspects relevant to economic development. While the whole world is collapsing, Philippine is no exception to facing the impact of coronavirus. Among all the industries in the Philippines, both commercial, residential construction companies have already felt the heat of uncertainty as the constructions were halted during the lockdown period, which was imposed with the view to curbing the infection rate to a minimum.
Philippine Statistics Authority’s (PSA) recently revealed that the number of construction projects fell 22.4 percent to 30,838 from 39,762 in 2019, and it is evident that the number fell down during the pandemic to a great extent. Moreover, Janlo de los Reyes, Head of Research and Consultancy at JLL Philippines, recently said, “The impact of the COVID-19 pandemic has been swift and immense as evidenced in the immediate economic, lifestyle, and structural shifts experienced across the globe—and the Philippine real estate market has been no exception[…].” Subsequently, contractors in the Philippines have felt the heat and are struggling to get back on track.
Owing to several reasons, construction companies in the Philippines collapsed, which will take time to yield that constant revenue from the real estate sector of the Philippines. Mapping out the prime reasons behind such drastic collapse, low mobility, or zero mobility is one of the primary reasons to be blamed for hindering all the running construction as well as the initiation of the construction tasks. Another important factor behind reeling down the real estate progression is the suspension of bank loans, which required starting the construction process effectively.
Moving toward the business strategy as the next importance, constructors have to come up with the matching business strategies to ensure swift recovery of the deterioration in the residential real estate or construction business overall. The primary aim of the business strategy ought to be amplifying the complete support. Experts believe that the construction companies can go for a price reduction that needs to be patronized by the material suppliers and its relevant stakeholders. On the bright side, Enrique Soriano III, executive director of Wong+Bernstein Advisory optimistically commented such circumstance in the construction companies or real estate sector is not permanent, instead, it is a temporary condition that can be taken under consideration and revive the market to a great extent.
It is worth mentioning that there is still a substantial unmet demand for housing in the range of 6 million units and that investors’ trust on the property can be exploited as a sustainable long term investment. This lights up the hope that there are pending construction tasks which are enough to let one or two companies survive and get back right on the track. Needless to say, the contractors might have to look for the right business strategies, for instance: cut down the overall cost to half (if possible), compensate the labours understanding their needs, offer an exclusive price to those who are looking forward to making a deal and other necessary steps. Hence, contractors in the Philippines will be able to get minimum profit and stay focused on the consumers’ purchasing preferences.
Real estate companies play the most significant role in terms of keeping the economy running flawlessly and efficiently, and in the Philippines, real estate companies have the same kind of role. Looking at the data revealed by BOI in 2018 (as exact data till the date is not available), the real estate industry contributed a total of3.2% to the country’s 2017 GDP. Comparatively, an increase of 12% was posted by the sector concerning the 2016 values.
On the whole, albeit the construction companies have been hit hard by pandemic, in optimistic and affirmative viewpoints, positivity is now shedding over the industry and making it robust than ever.