Approved building permits edge up 0.8% in 2025

By Isa Jane D. Acabal, Researcher

APPROVED BUILDING PERMITS inched up by 0.8% year on year in 2025, as construction activity moderated amid macroeconomic headwinds and the flood control mess in the second half of the year, analysts said.

Data from the Philippine Statistics Authority showed the number of building permit approvals rose to 181,832 in 2025 from 180,341 a year earlier.

However, the uptick was slower than the 5.3% growth in 2024.

This was the weakest pace in two years or since the 1.7% decline logged in 2023.

Construction projects covered 45.24 million square meters (sq.m.) of floor area, up 5.6% from 42.84 million sq.m. in 2024.

In 2025, approved building projects were valued at P601.42 billion, 6.7% higher than the P563.89 billion logged in the previous year.

“The minimal increase in approved building permits likely reflected growth headwinds at the time. An extended condo oversupply and the graft scandal in the second half of the year weighed on developer appetite,” Marco Antonio C. Agonia, an economist at the University of Asia and the Pacific, said in an e-mail.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the building activity showed moderation rather than weakness in 2025.

“Developers and households pulled back slightly as interest rates stayed elevated, construction costs remained sticky, and demand especially for office space became more cautious after a strong 2024,” he said in a Viber message.

Residential buildings, which made up the bulk or 64.8% of the total number of projects, inched up by 1.2% last year to 117,832 from 116,427 in 2024.

The total value of residential projects reached P253.64 billion, up by 2% from P248.65 billion a year earlier.

Single-type houses, which made up 85.3% of residential construction, rose by 3.1% year on year to 100,552 in 2025 from 97,490.

On the other hand, building permits for apartments fell by 9.9% to 14,215, while permits for duplex or quadruplex homes declined by 7.8% to 2,773.

Meanwhile, nonresidential construction projects dipped by 0.6% annually to 38,991 last year from 39,238 in 2024. This accounted for 21.4% of the total number of constructions in 2025.

The value of these nonresidential projects totaled P278.65 billion, 11.1% higher than P250.86 billion in 2024.

Commercial buildings saw a 2.4% year-on-year decline to 26,395 from 27,053. These made up 67.7% of total nonresidential constructions.

Institutional building projects also declined by 2.5% annually to 6,751, while industrial permits rose 13% to 3,356.

Agricultural projects surged 17.8% to 1,375 in 2025. Other nonresidential constructions fell 1.1% to 1,114.

Building permits for addition, or any new construction that increases the height or area of an existing building, contracted by 0.7% year on year to 5,655 in 2025 from 5,694 in the previous year.

On the other hand, alteration and repair of buildings totaled 14,372, up 2.7% from 13,997 a year ago. These were valued at P43.75 billion.

By region, Calabarzon logged the highest number of approved building permits at 44,819, making up 24.6% of all permits.

Central Luzon followed with 24,889 (13.7% share) and Ilocos Region with 14,048 (7.7% share).

“Regions like Calabarzon and Central Luzon continue to lead because of improving infrastructure, proximity to Metro Manila, and the steady shift of economic activity outward, this is decentralization in action and a positive sign for more balanced growth,” Mr. Ravelas said.

For Mr. Agonia, the large share of approved building permits in Calabarzon reflected the wave of developments in areas near Metro Manila.

“These growing regions have attracted investments, urbanization efforts, and industrial parks from firms looking to set up outside of the dense urban core. Housing affordability is also better in these regions compared with the Metro,” he said.

Mr. Agonia said construction projects may see a “lift” in the second semester, “but it may take time for pre-crisis growth to return.”

“Risks to the downside include elevated borrowing rates and building material costs along with subverted economic confidence,” he added.

Mr. Ravelas also expects building projects to pick up at a modest, measured pace this year with easing rates and continued infrastructure spending.

“In short, the sector is not losing steam; it’s transitioning to a more sustainable, regionally driven growth path,” he said.