Philippines, 9 July 2025 — Arcadis, the leading global design and consultancy organization for natural and built assets, announced the release of its annual International Construction Costs (ICC) report. In this year’s report, Manila is ranked 83rd out of 100 cities globally, maintaining its place from 2024 and highlighting the city’s stable construction costs amid the challenges of a rapidly evolving global market.
Manila's position contrasts with the volatility seen in other major international markets, which continue to face significant cost pressures. Geneva has reclaimed the top spot as the world's most expensive city to build in, followed by London, Zurich, Munich and New York City. Notably, several Asian cities also rank among the most expensive globally, with Tokyo, Singapore and Hong Kong placing in the top 20.
The ICC 2025 report reveals that while ongoing economic uncertainty and high borrowing costs continue to shape the investment landscape for construction globally, many markets have shown signs of recovery in the past year, with inflationary pressures easing in some regions.
Bryan Alcantara, Associate Technical Director at Arcadis Philippines comments:
"Our Arcadis Philippines Cost Handbook 2025, released last May, provides the local market data that underpins Manila's consistent ranking in the ICC 2025 report. A modest 1.58% increase in overall construction costs, mainly due to forex shifts and minimum wage hikes, reflects improved market stability compared to previous inflationary periods. Looking ahead, the Tender Price Index is projected to be between 2.48% and 2.55%, aligning with ICC 2025's broader findings on regional market recovery.”
Supporting Manila's strong performance, the Philippine economy grew by 5.4% in the first quarter of 2025—outpacing many of its regional peers. This growth was attributed to expansion in the services, industry and agricultural sectors, according to the Philippine Statistics Authority (PSA). Economic indicators have also shown positive trends, with inflation easing earlier this year and further slowing to 1.4% in April 2025. As part of efforts to accelerate economic growth, the government's infrastructure allocation for this year totals P1.538 trillion.
Manila's competitive standing in the ICC 2025 rankings is supported by several strengths, including the use of locally manufactured construction materials, competitive labor rates and lower costs in securing permits. However, the city still faces challenges—especially in the private construction sector—such as high interest rates, ongoing concerns about inflation and a shortage of skilled workers across private and public construction projects, despite signs of overall market stabilization.
Joycelyn Pagcatipunan, Country Sales Director at Arcadis Philippines shares:
"Manila's maintained position in the global cost rankings reflects market stability, but developers are rightly reassessing their pipelines given the broader market landscape. While our Tender Price Index forecasts modest increases of 2.48% to 2.55%, ongoing global uncertainties, geopolitical tensions and other local challenges are prompting stakeholders to continue refining their strategies. We're advising clients and construction stakeholders to leverage value engineering, adopt digital tools and explore strategic partnerships or rate partnering, so they can better position themselves for success in a complex environment."
The ICC report ranks construction costs across 100 cities worldwide and outlines four key considerations for managing construction risk and maximizing project value: design for long-term value, design for certainty, design for delivery and design in collaboration. For local stakeholders seeking deeper market intelligence, the Philippines Cost Handbook offers detailed local cost data that complement the global ICC findings, providing valuable context for understanding Manila's competitive positioning.
