Construction activity across the Philippines experienced a significant contraction in September 2025, according to the latest data from the Philippine Statistics Authority. The sector saw a sharp decline in approved building permits, signaling a notable slowdown in one of the country's key economic drivers.
Sharp Decline in Building Approvals
The Philippine Statistics Authority reported that approved building permits plummeted by 25 percent year-on-year in September 2025. The total number of approved constructions dropped to 11,746 from 15,663 recorded during the same month in 2024. This represents a dramatic acceleration of the downturn, following only a 0.6 percent annual decline in August.
Both residential and non-residential construction segments recorded double-digit decreases, indicating broad-based weakness across the construction industry. The residential sector, which traditionally dominates the construction pipeline, accounted for 7,209 permits or more than three-fifths of all projects. However, this segment suffered the most severe contraction, falling 30.5 percent from the 10,379 residential permits approved in September 2024.
Construction Value and Project Costs
The total value of construction projects also witnessed a substantial decline, dropping 16.1 percent to P45.14 billion from P53.78 billion in the same month last year. Residential projects accounted for P19.94 billion, representing 44.2 percent of the total construction value, while non-residential construction value fell even more sharply by 24 percent to P19.03 billion.
Average construction costs showed some relief for developers, declining 4.9 percent to P12,390 per square meter from P13,033 a year earlier. Residential projects remained the costliest to build at an average of P15,562 per square meter, with condominiums posting the highest average construction cost at P24,100 per square meter.
Segment Analysis and Market Composition
Within the residential sector, single-detached houses continued to dominate, making up 85 percent of all residential projects. The value of single-detached homes reached P11.32 billion, leading the residential construction value segment.
Non-residential projects reached 2,782 permits, representing 23.7 percent of the total and declining 15.4 percent from a year earlier. Commercial buildings comprised the bulk of these projects at 1,808 permits, accounting for 65 percent of non-residential construction. Institutional buildings posted the highest value among non-residential structures at P7.57 billion, representing nearly 40 percent of the non-residential construction value.
The Philippine construction sector's sharp decline in September 2025 raises concerns about the industry's near-term prospects and its potential impact on economic growth, employment, and related industries throughout the country.
