Approved building permits fell 11.6% in May compared with the same month a year earlier, marking the steepest decline in eight months amid rising construction costs and higher borrowing rates.
Preliminary data indicated that the number of building projects covered by permits dropped to 15,436 in May from 17,466 a year earlier. The floor area of projects in May totaled 3.37 million square meters, down 7.8% from 3.66 million square meters a year prior.
The total value of approved projects slipped to P47.05 billion, a 1.2% decrease from P47.64 billion in May of the previous year.
Joey Roi Bondoc said in an e‑mail that higher interest rates have increased financing costs for developers, while wholesale prices for construction materials rose 2.8% in May, further eroding profit margins.
Residential permits, which represent 65.8% of all approvals, fell 15.5% year‑on‑year to 10,154. The value of these residential projects reached P24.73 billion, slightly above the P24.4 billion recorded a year earlier.
Single‑family homes, accounting for 85.5% of residential permits, declined 15.6% to 8,682 approvals. Permits for duplexes or quadruplexes dropped 19.5% to 206, and apartment permits fell 20% to 1,166.
Bondoc expects developer launches to remain conservative throughout 2026, noting a prolonged inventory life of nearly seven years in Metro Manila.
Non‑residential permits slipped 5.5% to 3,052 in May, with project values decreasing 5.1% to P17.94 billion. Commercial developments, which comprise 63.5% of non‑residential projects, fell 11.5% to 1,938 permits.
Industrial permits rose 12% to 317, while institutional permits increased modestly by 2.1% to 573, indicating a shift toward sectors with stable, long‑term demand.
Bondoc highlighted that developers are likely to prioritize less risky, essential projects such as warehouses, schools, hospitals, and factories.
Permits for agricultural construction surged 78.4% to 182. Approvals for additions to existing buildings declined 4.7% to 543, and alteration and repair permits fell 11.5% to 1,073.
The region of Calabarzon contributed the largest share of approvals at 26.8% with 4,144 permits, followed by Central Luzon at 12.2% (1,888 permits) and the Ilocos Region at 9.1% (1,408 permits).
Bondoc projects that residential and commercial investment will continue to slow in the second half of 2026, while industrial and institutional developments are likely to stay active, suggesting overall construction activity may expand only modestly unless financing conditions improve.
Construction statistics are compiled from original application forms of approved building permits, as well as demolition and fencing permits collected monthly by field personnel from local building offices nationwide.
