Fitch Solutions believes that infrastructure will continue to be at the forefront of the Philippines’ economic policy under the new Marcos administration.
Following a landslide victory, President –elect Ferdinand “Bongbong” Marcos Jr. has reiterated his commitment toward infrastructure developments, and to continue on with President Duterte’s ‘Build Build Build’ program.
The research arm of the Fitch Group said the infrastructure buildup has been, and will remain, a key policy driving investments in the construction sector, while the progress on the execution of projects will have a heavy influence on growth of the sector over the near to medium term.
“As such, we expect broad policy continuity and for the market to see ongoing levels of support for the sector, including a supportive regulatory framework to facilitate investment and strong fiscal support,” Fitch Solutions said.
The company is maintaining its robust growth outlook for Philippines construction and infrastructure market over the coming decade, growing by a forecast 16.1 percent in real terms in 2022 and averaging 8.2 percent to the end of our forecast period in 2031.
“This will see The Philippines as one of the fastest-growing markets in the region,” Fitch Solutions added.
For the very short term, it believes that foreign investors are likely to adopt a wait-and-see approach for the Marcos administration to provide more certainty on his plans.
It also sees funding support from Japan to moderate gradually, while financing from China is expected to accelerate due to the country’s close ties with Beijing during the Duterte administration.
“Chinese funding still pales in comparison with Japanese funding, but we expect Japanese dominance to slowly erode over time and for Chinese funding to play a greater role in project financing,” Fitch Solutions said.