D.M. Consunji, Inc., the construction arm of DMCI Holdings, Inc., is seeing private property developers holding out on their construction plans due to high interest rates, its top official said.
“We have biddings, but no decisions yet by the developers on the private side. It’s because of the high interest [rates] and [people are] very cautious,” Jorge A. Consunji, D.M. Consunji president and chief executive officer, told BusinessWorld.
“Hopefully, that confidence comes in,” he said, ahead of private developers’ decision to start their projects.
“We have submitted quite a number of bids [for] private [companies], but they have not decided to start today. They are in a wait-and-see [mode for now],” Mr. Consunji said.
In May, inflation cooled for a fourth straight month to 6.1% from the 6.6% post in April, data from the Philippine Statistics Authority showed. This was the slowest rate since the 5.4% in May 2022.
For the first five months, headline inflation averaged 7.5%, still well above the central bank’s 2-4% target and its 5.5% forecast for the year.
Meanwhile, Mr. Consunji said the company expects the handover of the areas in Quezon City for the subway project and in Manila for the south commuter railway project during the latter part of the year.
“We were told that it should kick in probably [during] the last week of the year, best effort malamang mga (probably around) late third quarter,” he said.
The company disclosed earlier that it had won a P21-billion contract for the Quezon Ave. and East Ave. underground stations and tunnels in partnership with Japanese firm Nishimatsu Construction Co. Ltd.
The second package of the north-south commuter railway involves the construction of railway tracks and stations along España Blvd. and the Sta. Mesa and Paco districts in Manila.
The contract, which is under a joint venture with Acciona Construction Philippines, is expected to cost about P28 billion and is slated for completion after about four-and-a-half years.
Mr. Consunji said in an earlier statement that the project is expected to generate construction revenues for the company as well as collateral business for its ready-mix concrete, equipment rental, and steel fabrication units.
During the first quarter, the company reported a net income of P263 million, down 26% from P355 million due to lower construction accomplishments and fewer projects in its pipeline. — Adrian H. Halili