The global pandemic changes everything—even the basic construction costs. According to the latest PSA data, the construction cost per square meter is lower in 2020 than in 2019. COVID-19 has struck peoples' living. Many people have either lost their jobs or cannot afford construction because funds were allocated to more important things, like food and medical services. As a result, fewer demands for construction materials and services mean lower prices, you know, the fundamental law of supply and demand.

construction cost

But the pandemic is not forever. Thus, people can still pursue their dreams of owning or building their own houses. So let's go back to the question: How much would your dream home cost you?

Discussion Points:

  • Residential and Non-Residential Construction Cost per square meter.
  • Variation of construction cost per square meter per region.
  • Construction cost data from construction management companies.

By the way, we presented three discussion points to widen our views regarding construction costs. Cost varies greatly. So it would be best to look at different information from as many angles as possible.

Residential and Non-Residential Construction Cost per Square Meter


TYPE OF CONSTRUCTION		 4th QUARTER OF 2020 4 th QUARTER OF 2019
RESIDENTIAL 10,590.00 11,872.00
NON-RESIDENTIAL 9,772.00 11,684.00
Source: PSA-Construction Statistics from Approved Building Permits Fourth Quarter 2020

When looking for statistical data on construction costs, the Philippines Statistics Authority or PSA has it. Every quarter, quarter, PSA publishes data regarding the number of constructions in the Philippines. Data are based on the approved construction project permits. Included on the construction permit are the estimated cost and the total area of the project. So that means construction cost per area can be determined.

Residential Construction Costs (Pesos per Square Meter)

TYPE OF CONSTRUCTION 4th QUARTER OF 2020 4 th QUARTER OF 2019
RESIDENTIAL 10,590.00 11,872.00
Single House 10,011.00 10,021.00
Duplex/Quadruplex 10,954.00 12,071.00
Apartment/Accessoria 9,889.00 9,237.00
Residential Condominium 15,271.00 19,500.00
Other Residential 7,995.00 6,364.00
Source: PSA-Construction Statistics from Approved Building Permits Fourth Quarter 2020

Non-Residential Construction Costs (Pesos per Square Meter)

TYPE OF CONSTRUCTION 4th QUARTER OF 2020 4 th QUARTER OF 2019
NON-RESIDENTIAL 9,772.00 11,684.00
Commercial 9,404.00 11,538.00
Industrial 7,345.00 10,376.00
Institutional 13,079.00 15,234.00
Agricultural 4,418.00 5,076.00
Source: PSA-Construction Statistics from Approved Building Permits Fourth Quarter 2020

Of course, being these are estimated costs, these are NOT the actual costs of construction. But these data offer great insights into how much it would be to build a house or other buildings. After all, in planning your construction budget, it is better to start from something than nothing at all, right?

Variation of Construction Cost per Region

It turns out, construction cost varies depending on where you are planning to build. Regional variations in construction cost depending on material availability and possibly local regulations.

Construction Cost in Different Regions (Pesos per Square Meter)

REGION RESIDENTIAL NON-RESIDENTIAL
National Capital Region 14,480.00 12,209.00
Cordillera Administrative Region 11,157.00 12,604.00
I-Ilocos Region 9,969.00 11,411.00
II-Cagayan Valley 9,886.00 10,944.00
III-Central Luzon 10,170.00 6,965.00
IVA-CALABARZON 9,845.00 10,709.00
IVB-MIMAROPA 9,545.00 11,722.00
V-Bicol Region 12,089.00 13,360.00
VI-Western Visayas 11,068.00 10,185.00
VII-Central Visayas 9,562.00 10,604.00
VIII-Eastern Visayas 9,450.00 8,650.00
IX-Zamboanga Peninsula 7,897.00 9,823.00
X-Northern Mindanao 5,920.00 7,260.00
XI-Davao Region 7,040.00 9,399.00
XII-SOCCSKSARGEN 8,983.00 10,527.00
XIII-Caraga 8,123.00 9,012.00
Bangsamoro Autonomous Region in Muslim Mindanao 8,411.00 4,336.00
Source: PSA-Construction Statistics from Approved Building Permits Fourth Quarter 2020

Construction cost data from Construction Management Companies

Aside from looking at PSA data, construction companies publish their own data. These data were from their previous experiences on different projects that they handled.

The following construction cost data are from Arcadis.

Arcadis is a global design, engineering, and management consultancy based in the Netherlands. They have their local operations here in the Philippines.

Below are their cost data. Just a few notes. The "total" construction cost is the sum of the "building" and "services" costs. Building refers to the construction services and materials, while services refer to electrical, mechanical, plumbing, and other services.

Total Construction Costs as of 4th Quarter of 2018 (Peso per Square Meter)

DOMESTIC BUILDING SERVICES TOTAL
Apartments, high rise, average standard 39,790 – 46,650 8,910 – 13,230 48,700 – 59,880
Apartments, high rise, high end 53,526 – 92,080 12,180 – 19,070 65,706 – 111,150
Terraced houses, high end 36,813 – 43,581 2,760 – 4,810 39,573 – 48,391
Detached houses, high end 76,027 – 127,806 8,700 – 15,880 84,727 – 143,686
Source: ARCADIS-Construction Cost Handbook Philippines 2019
OFFICE/COMMERCIAL BUILDING SERVICES TOTAL
Medium/high rise offices, avaerage standard 36,978 – 41,196 11,480 – 15,550 48,458 – 56,746
High rise offices, prestige quality 50,940 – 53,011 14,750 – 20,310 65,690 – 73,321
Out-of-town shopping centre, average standard 27,110 – 34,440 9,480 – 14,870 36,590 – 49,310
Retail malls, high end 45,846 – 61,091 10,930 – 18,470 56,776 – 79,561
Source: ARCADIS-Construction Cost Handbook Philippines 2019
HOTELS BUILDING SERVICES TOTAL
Budget hotels – 3-start, mid-market 48,547 – 51,031 13,550 – 18,200 62,097 – 69,231
Business hotels – 4/5-star 55,225 – 62,389 14,750 – 22,400 69,975 – 84,789
Luxury hotels – 5-star 78,554 – 102,027 17,630 – 31,120 96,184 – 133,147
Source: ARCADIS-Construction Cost Handbook Philippines 2019
INDUSTRIAL BUILDING SERVICES TOTAL
Industrial units, shell only (conventional single story framed units) 20,692 – 20,821 4,400 – 7,700 25,221 – 28,392
Owner operated factories, low rise, light weight industry 31,182 – 32,904 4,400 – 8,700 35,582 – 41,604
Source: ARCADIS-Construction Cost Handbook Philippines 2019
OTHERS BUILDING SERVICES TOTAL
Underground/basement car parks (<3 levels) 20,789 – 23,208 4,860 – 8,980 25,649 – 32,188
Multi-story car parks, above ground (<4 levels) 20,035 – 25,169 4,630 – 9,680 24,665 – 34,849
Schools (primary and secondary) 27,678 – 31,734 8,740 – 18,480 36,418 – 50,214
Students' residences 30,099 – 34,336 8,430 – 15,090 38,529 – 49,426
Sports clubs, multi-purpose sports/leisure centers (dry sports) with a/c and including FF&E 53,783 – 77,095 7,820 – 12,530 61,603 – 89,625
General hospitals – public sector 52,183 – 56,427 14,690 – 23,930 66,873 – 80,357
Source: ARCADIS-Construction Cost Handbook Philippines 2019

A Large Gap Between Costs

Suppose you compare the construction cost per square meter presented by PSA and Arcadis. In that case, you will notice that the values are pretty far.

Why is that?

Well, a possible explanation is that PSA consolidates all the data coming from all over the country. All costs ranging from low cost or bare-minimum construction projects to high price and high-end projects are all averaged. On the other hand, companies like Arcadis could base their data on previous projects. These companies would also include their overheads(which vary on different companies) on the construction cost.

Summary

There are a lot of things to consider in construction. One of the very first things that should be considered is cost. In reality, the actual cost of construction will only be known when the construction project itself is finished. But it is best to have an estimation of the possible construction cost. In order to have the best estimation, talk to the experts. Ask your architect for help.

To sum up all points:

  • Construction cost in the Philippines according to PSA data ranges from Php 9,000.00 per sqm to as much as Php 15,000.00 per sqm. Of course, this could mean that the prices are most probably the average of all the cost of construction in every construction permits approved.
  • Php 15,000.00 per sqm sounds ridicuoluosly cheap, even far from reality, but remember that this cost estimate if from the approved construction permits. The PSA collects the data from all over the country and arrived at an average.
  • Construction companies like Arcadis indicate that construction costs can be as high as Php 140,000.00, assuming a high-end finish.
  • It is safe to assume that the baseline construction cost would be Php 25,000.00 per sqm for a descent style.
  • Construction cost varies depending on the location of the project.