Approved building permits fall 22.6% in Oct.

By Heather Caitlin P. Mañago

APPROVED building permits declined by 22.6% year on year in October, signaling a slowdown in construction activity amid economic headwinds, the Philippine Statistics Authority (PSA) said in a report.

Preliminary data showed building projects covered by the permits fell to 12,705 in October from 16,405 a year earlier.

This was a reversal from the 23.2% expansion in October 2024 and was steeper than the revised 18.5% contraction in September 2025.

In October, construction projects covered 3.48 million square meters (sq.m.) of floor area, down 20.2% year on year from 4.36 million sq.m.

These building projects that received approval were valued at P43.63 billion, 13.5% lower than a year earlier when it reached P54.45 billion.

“The sharp drop in building permits reflects high borrowing costs and tighter liquidity, which forced developers to delay projects amid corruption-related uncertainty and softer consumer demand,” Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said in a Viber message.

Marco Antonio C. Agonia, economist at the University of Asia and the Pacific, attributed the decline to the pessimistic economic outlook after weaker-than-expected third-quarter gross domestic product (GDP) growth.

GDP expanded by an annual 4% in the three months through September, the slowest growth logged since the 3.8% contraction in the first quarter of 2021.

Mr. Ravelas warned that the slowdown in construction, a key driver of economic activity, signals a weaker project pipeline and fewer job opportunities.

The number of jobless Filipinos rose by about 570,000 to 2.54 million in October from a year earlier, even as overall employment increased by 460,000, the PSA reported.

This brought the jobless rate to 5% from 3.8% in the previous month and 3.9% a year ago. It was also the highest in three months or since the post-pandemic high of 5.3% in July.

The unemployment rate averaged 4.13% in the first 10 months from 4% in the same period a year ago.

PSA data also showed residential projects, which made up 62.2% of all permits, fell sharply by 27.4% to 7,900 in October.

These projects were valued at P15.20 billion, down from P25.10 billion a year earlier.

Single homes, which accounted for almost 87% of the residential category, fell by 17.3% year on year to 6,847.

Applications for apartment buildings also tumbled by 54.8% to 909 while applications for duplex or quadruplex homes plummeted by 78.4% to 126.

On the other hand, nonresidential projects contracted by 6.6% year on year to 3,097 permits from 3,316 in October 2024. This accounted for 24.4% of the total.

Permits for nonresidential projects were valued at P22.84 billion, slipping by 23.2% from a year earlier.

Meanwhile, approved commercial construction applications contracted by 10.9% to 2,032. These made up 65.6% of all nonresidential projects.

Industrial permits fell by 3.1% to 253, while institutional projects were flat at 614 approvals.

There were 127 permits for agricultural projects that were approved, up by 86.8%, while 17 permits for other nonresidential works fell by 22.8%.

Approved permits for additions, or construction that increases the height or area of an existing building, also plunged by 54.1% to 196.

On the other hand, approved alteration and repair permits totaled 1,103 in October 2025, 14.6% lower from a year earlier, and were valued at P4.27 billion.

Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) had the most approved construction projects during the period, accounting for almost 20% of the total with 2,514 permits.

This was followed by Central Luzon (13.4% share with 1,699 permits), and Ilocos Region (9.2% share with 1,172 permits).

Mr. Ravelas attribute the resilience of these regions “to strong housing demand, proximity to Metro Manila, and industrial growth.”

Meanwhile, Mr. Agonia said that “developers are likely spreading out of Metro Manila into neighboring, higher-growth potential regions.”

In the second quarter, the Bangko Sentral ng Pilipinas’ (BSP) Residential Property Price Index (RPPI) showed housing prices nationwide went up by 7.5%.

Home prices in the National Capital Region (NCR) went up by 2.4% in the second quarter, slowing from 13.9% in the previous quarter and 9.3% last year.

The BSP will release the RPPI for the third quarter on Dec. 26.

Analysts expect a lukewarm performance in the construction industry for the rest of the year.

“Full-year permits will likely finish below 2024 levels as high interest rates and cost pressures as well as corruption related issues continue to weigh on sentiment,” said Mr. Ravelas.

Mr. Agonia said that “the construction industry will likely see lukewarm performance through the rest of the year, given major local headwinds weighing on appetite.”

He added that after the third-quarter growth slowdown, government spending may fall short, and private firms continue to tread carefully.

The PSA said construction statistics are compiled from the copies of original application forms of approved building permits as well as from demolition and fencing permits collected monthly by the agency’s field personnel from the offices of local building officials nationwide.