Philippine builders to benefit from state infra spending

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 in a Viber message.

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 PHP 142.7 million from a net loss of PHP 29.85 million a year earlier. Revenue rose 10.9% to PHP 5 billion.

EEI Corp. had an attributable net loss of PHP 31.75 million in the third quarter from an attributable net income of PHP 406 million a year earlier as gross revenue fell 27.8% to PHP 3.14 billion.

Phinma Corp., which has a construction material unit, posted an attributable net income of PHP 144.86 million in the third quarter, 75.1% lower than a year earlier, even as revenue rose 0.5% to PHP 6.61 billion. Gross expense increased by 2.4% to PHP 5.5 billion.  –  Ashley Erika O. Jose, Reporter