The Philippine construction sector experienced a significant contraction in October 2025, according to the latest official data. The Philippine Statistics Authority (PSA) reported a sharp, double-digit decline in building permits issued nationwide, signaling a continued slowdown in one of the economy's key industries.
Steep Decline in Building Permits
The PSA data shows that approved construction projects plummeted by 22.6 percent in October 2025 compared to the same month last year. The number of building permits granted fell to 12,705 from 16,405 in October 2024. This marked a deepening of the downturn, following an 18.5 percent annual drop recorded in September.
The total value of these constructions also declined, dropping 13.5 percent year-on-year to P43.63 billion. In parallel, the total floor area of approved projects shrank by 20.2 percent to 3.48 million square meters.
Residential Sector Bears the Brunt
The slowdown was primarily driven by a severe pullback in housing projects. Residential constructions, which made up more than three-fifths of all approved projects, saw a dramatic 27.4 percent decrease.
Only 7,900 residential building permits were approved in October. Of these, single-type houses dominated, constituting 86.7 percent of all residential projects. The value of residential construction fell even more sharply, plunging 31.2 percent to P15.20 billion, which represented 34.8 percent of the total construction value for the month.
Non-Residential and Commercial Projects Also Weaken
Non-residential construction did not escape the downturn, though its decline was less severe. This segment, totaling 3,097 projects or 24.4 percent of the overall count, fell by 6.6 percent annually.
Commercial buildings were the majority within this category, accounting for 65.6 percent of non-residential projects. Interestingly, non-residential buildings accounted for the largest share of total construction value at P22.84 billion (52.4% of the total), despite a five percent annual decline. Institutional buildings, such as schools and government facilities, posted the highest individual value at P9.07 billion.
In terms of floor area, non-residential projects occupied 63.1 percent of the total, while residential projects made up 36.2 percent.
Rising Costs Amidst Falling Activity
A notable trend highlighted by the PSA was the increase in average construction costs even as activity weakened. The average cost per square meter rose by 2.8 percent to P10,980.98.
Residential buildings recorded the highest average cost at P12,078.24 per square meter. This indicates that while fewer projects are moving forward, the cost of building them continues to climb, potentially impacting affordability and investment decisions.
The October 2025 data paints a clear picture of a construction sector facing strong headwinds. The steep decline, particularly in the residential segment which is a major economic driver, will be a key area for policymakers and industry stakeholders to watch in the coming months.
