Recently, Matt Schur of the Project Management Institute interviewed KMC MAG Group's Project Management Associate Director, Jason Valderrama regarding the possibilities and challenges brought about by the ongoing boom in the construction industry to the Philippines: how are project managers affected by the current boom, how will this phenomenon influence project management in the country, and what possible obstacles could affect construction in the Philippines. During the interview, Valderrama also discussed potential solutions to these challenges and provided valuable insights and trends on project management in the Philippines. Here are some of the interview highlights:
Current trends in Philippine construction industry
Construction and real estate are expected to remain as the fastest growing industries in the Philippines, especially since the country's economic outlook remains bullish. "It is expected that the Philippines will receive its 3rd investment grade rating this year. Strong macroeconomic fundamentals, low inflation rate, low development financing rates and continuous influx of OFW remittances will drive further growth in the construction and real estate sectors." said Valderrama.
All types of developments are currently in the pipeline to keep up with the market demand. High demand for commercial spaces is driven by the growing BPO sector, residential projects are fueled by the rising incomes and housing needs of the middle-class, while infrastructure projects are mostly driven by the country's need to keep up with the demand of the economy. Valderrama said, "The demand for BPO facilities and commercial office spaces continues as more and more foreign companies outsource their back-office functions to the Philippines, leveraging on the cheap but highly-skilled labour pool. Developers continue to fill their inventories with residential developments to address the chronic housing backlog and to take advantage also of the constant inflow of OFW (Overseas Foreign Workers) remittances."
Greater demand for project managers
The predicted increase in construction is expected to create more opportunities for project managers. However, this also means increased competition and higher premium on specialized skills and talents. "They (project managers) should be able to understand the dynamics and idiosyncrasies of the local market. Since most of the projects at the moment in the Philippines are fast-track in nature, practitioners should be quick on their toes and can make decisions without losing sight of the project objectives. The ability to manage finite resources and resolve project disputes amicably are paramount as well." he advised.
The current construction boom in the Philippines is expected to create greater demand not just for projects managers, but for people with skills needed in construction and real estate. According to Valderrama, "The surging construction market will continue to need planners, engineers, architects, project managers, construction managers, procurement officers, surveyors, estimators, and skilled (crane operators, carpenters, etc.) and non-skilled construction workers (laborers, truck drivers, etc.). You will also see a lot of opportunities in the real estate development side such as project analysts/researchers, valuation professionals/appraisers, brokers and project development managers."
Obstacles and limitations
Valderrama cited foreign ownership laws, widespread bureaucracy and corruption, as well as high taxes in the Philippines as the main obstacles for foreigners who wish to invest in the country. Once policies are relaxed and corruption is taken out of the equation, he said that the Philippines is poised for continued growth and gains. "The new developments will definitely be a boon for the Philippines and will have a cascading effect to the national economy. These will drive more consumer spending and will entice more tourists to come into the Philippines. Millions of employment opportunities will also be generated given the surge in construction developments. Improvements in infrastructure, transportation and connectivity facilities will likewise spur growth and socio-economic progress in various localities outside of Metro Manila."
Watch for the upcoming article from PMI to get access to the full interview. Contact KMC MAG Group today to get up-to-date and comprehensive advice on investment and project management in the Philippines.