Investing in the Pandemic – Resilient Sectors to Rely On

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The pandemic effectively crippled the world economy in 2020, affecting the most lucrative sectors and businesses alike. 

While food manufacturing, logistics, telecommunications, and even groceries and essential retail have been able to thrive and stay afloat all year round, the same thing can’t be said for the Property and Construction Industries that were gravely affected that very same year. 

Looking into it now, are property and construction industries making a comeback towards a more resilient future? 

 

How the Pandemic Affected the Construction Industry

In the Philippines, the construction industry has always been a major contributor to economic growth. 

Construction gross fixed capital formation accounts for nearly P3 trillion in real terms, or 1.8 percentage points of the 6.6% average GDP growth over the past four years.

However, since the pandemic began, the industry saw a 33-per cent contraction in the second quarter due to strict quarantine controls implemented as a preventive measure against the spread of COVID-19.

A year later, construction projects slowly but surely trickled into a massive boom after resuming mid-May last year. Since then, some experts now claim that the property and construction industries are currently driving the country’s economic growth.  

 

How the Construction Industry Bounced Back as a Major Player in Economic Growth

Both property and construction industries are well on their way to make a significant rebound this 2021. 

In creating more projects and infrastructures, new jobs generated by the industry for this year will be substantial. Government infrastructure projects in themselves creating 1.7 million direct and indirect jobs. 

Besides the benefits one can attain from the construction phase alone, such as job production, infrastructure can create a multiplier effect in the economy. It could potentially create a ripple effect of market activity in the community it is built on. It could pave the way for more mobility and foster new business opportunities. 

With all of these factors combined, the construction industry in the country is expected to bounce back in 2021. Forecasts indicate an annual average rate of 8.3 percent from then until 2024, taking its output value up to US$75.1 billion that year, as stated by the data and analytics firm GlobalData in an August 20 note. 

Even the Asian Development Bank (ADB) expects the Philippine economy to recover and grow at least 4.5 percent this year and 5.5 percent in 2022. 

The firm cited drivers of growth this year. It includes big spending on public infrastructures with large employment multipliers, moderate pick up in household spending, increased export of goods with global recovery, and fiscal policy expansionary by 1.3 percentage points of GDP supported by accommodative monetary policy. 

 

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Reasons to Believe: Megawide, The Construction Firm Driving the Country’s Economy by Storm

One firm focusing on public infrastructure projects is the current leading engineering and infrastructure construction firm, Megawide

Megawide is one of the leading engineering and infrastructure firms in the Philippines today. The company’s dynamic nature and diverse portfolio in Engineering, Procurement, Construction, and Transport-oriented Development, have allowed them to thrive and navigate the pandemic. 

Its revolutionary construction and engineering solutions set new standards in the industry. The company has integrated its first-world EPC capabilities with innovative construction technologies. Including precast, formwork systems, concrete batching as well as construction equipment, logistics, and services. 

 

Contributions

Amidst the ongoing challenges caused by the pandemic, Megawide’s revenue continued to sustain its momentum since the beginning of 2021. 

Landport operations of the PTIX contributed P187 million, while revenues from the MCIA reached P115 million.

Last year, Megawide’s construction business contributed P10.8 billion, or 84 percent of total revenues. 2020 ended with 21 live projects, along with negotiations with clients ongoing. 

The company also won new contracts in the final quarter of 2020, amounting to P34.8 billion. It ended the year with orders worth P68.4 billion, which is a clear indicator for future revenues. 

 

Projects

Noteworthy infrastructure projects from Megawide are the Mactan Cebu International Airport (MCIA) and Paranaque Integrated Terminal Exchange (PITX).

In 2019 – MCIA’s Terminal 2 won a prestigious award at the World Architecture Festival, winning the Completed Building-Transport category against Singapore Jewel Changi Airport, Hong Kong West Kowloon Station, Sydney Australia’s Barangaroo Ferry Wharf, and several other structures.*

In 2020, Megawide won huge infrastructure projects such as the Malolos Clark Railway Project (MCRP) and a 50-year contract in the Carbon Market District. 

Despite the challenges from the Pandemic, Megawide and GMR Infrastructure has also completed the construction of the Clark Internation Airport’s new passenger terminal at Pampanga gateway, located about 1000 kilometres north of Manila’s Ninoy Aquino International Airport. With its annual capacity of eight million passengers a year, it can undoubtedly help in decongesting NAIA.

Similar to the development of MCIA, the same inclusive economic benefits have opened in Central Luzon.  Unlocking new tourism and business opportunities–and ultimately help in restarting the economy.

 

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What Does the Future Hold?

New Landport locations have been identified and currently in discussion. The need for an organized transport system has become more prominent during the pandemic. This year, Megawide is gearing up to bid for two major railway projects, such as the Metro Manila Subway System and South Line – North-South Commuter Railway projects.  Megawide envisions potential Agri-Agra components to cater to wholesalers (“bagsakan” concept) and eventually market in these Landports.

Megawide’s MCIA and Clark International Airport’s new terminal are concrete proof that world-class and transit-oriented development can still be achieved, even amidst a global health crisis. 

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9 comments

  1. It is good that construction industry think different ways to make their business flexible ­and adjust the scale of operations. Also they examine the possibility of strategic acquisitions, in order to meet the challenges of the coronavirus crisis and be able to take advantage of the resulting opportunities.

  2. It’s really sad to know that we are all affected by the pandemic. But it makes me happy that we as we go and continue to go through this trying times, we still are hopeful that someday, we’ll be free from all of this. Just like us, the construction industry is making its way to thrive and never give up because many Filipinos are looking up to them either its the job or the project they ought to complete.

  3. This is really helpful. Its a big help specially these pandemic.❤️

  4. Magandang time din talaga ung ngaun magiinvest ng mga ganitong bagay mommy Kaycee. 😊 Laking tulong din in the future. Hnd din talaga hadlang ung pandemic for this.

  5. Lahat tayo apektado, sa pandemya, lalo na tatrabahu sa construction, kasi pag wlang patayong mga building wla din silang trabaho pano mapakain ang pamilya, laban tayo sa buhay ngayun lahat tayo nahihirapan, mgkaisa tayo at sumunod sa gobyerno wag maging matigas ulo upang maging matiwasay at maayus pamumuhay natin

  6. Wala po talaga pinipili itong pandemya na to..lalo last year 2020.. sobrang bumagsak ang ekonomiya ng bansa. Maraming mamamayan ang nawalan ng trabaho. Mga negosyo na nalugi, maliit man o malaki. Mabuti na lamang, ngayong taon, kahit papano, nakakabangon na paunti unti.

  7. Walang pinipili ang pandemya na to. lahat apektado. Kaya maraming trabaho at negosyo ang sobrang nalugi. Buti na lang po kahit papano, nakakabangon na paunti unti.

  8. Napakalaking tulong po talaga. Specially ngayong pandemic . Yess po masasabi kopo talaga na sobrang naapektuhan talaga ang construction industry. Sobrang dami po talaga ang paapektuhan simula ng nagka pandemic. Napaka gandang idea po talaga nito. 🤗❤️

  9. This kind of Blog Was really Amazing and Worth to Read dahil sobrang nakakaInspire po talaga, truly this is really big help lalo na po nqayong pandemic, and sobrang nakakaHanga at NakakaEncourage din talaga yung mga Construction Imdustry na nwalan ng trabaho dahil sa Covid pero sa kabila Nun, nanatili silang matatag at hindi nawalan ng Pag-asa kundi naghnap pa ng ibang paraan para kumita at magkaron ng panggastos sa araw araw ..

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