The local cement market is currently struggling due to multiple challenges, including alleged corruption within the Department of Public Works and Highways (DPWH), according to John Reinier Dizon, President of the Cement Manufacturers Association of the Philippines (CMAP).
“Medyo hirap [ang business]. Marami tayo na hinaharap na challenges," Dizon said.
Ramdam namin humihina yung merkado at base sa aming analysis isa na rin po sa factor ang ating nangyayari sa DPWH. ‘Syempre ‘yung mga kontratista at natigil din po yung mga bagong proyekto," he added.
He emphasized that the cement industry is closely tied to the country’s economic growth, especially with a population of 115 million Filipinos who depend on infrastructure development such as roads, airports, and bridges to help ease traffic and boost productivity.
According to Dizon, the Philippines has lagged behind its ASEAN neighbors in terms of infrastructure development, which is a crucial sector that should be driving national economic progress.
Before the pandemic, Dizon explained, the cement and construction sectors enjoyed steady growth, with a compounded annual growth rate (CAGR) of around 6 to 8 percent.
However, the pandemic disrupted that momentum. Even as the economy began to recover, the industry was hit by a “perfect storm” of challenges, including global supply chain disruptions, the energy crisis, and the Russia-Ukraine conflict which affected coal imports and power plant operations.
Rising interest rates also dampened construction activity.
“In the last 4-5 years nagging medyo flat po ‘yung growth ng cement ang estimate po namin mga 35 million tons ‘yung merkado natin medyo naging flat from 2021 up to the present,” he said.
He added that one major factor behind the industry’s stagnation is the slowdown of government projects linked to the DPWH corruption issues. “Contractors were affected, and many new projects were stopped,” he noted. “We believe not all government projects are tainted — many are legitimate — but the scandal has had a chilling effect.”
Based on Dizon’s research, around 421 out of 8,000 DPWH projects are suspected to be “ghost projects.”
He estimates that government construction accounts for about 40% of the total cement demand in the country, with the remaining 60% coming from private construction — mainly individual home builders, which he described as the industry’s “bread and butter.”
“'Yung mga segment siguro ng mga commercial mga 30 percent but going back to earlier question mga estimate mga 40% ang share po ng ating government. Ramdam po iyon," CMAP President explained.
”Despite the weaker demand, cement prices have remained stable for the past two years due to high competition among manufacturers. “This is good for Filipino consumers,” Dizon said, “but if prices fall any further, it will hurt everyone in the industry.”
When asked about the impact of President Ferdinand Marcos Jr.’s recent crackdown on corruption in DPWH, Dizon noted that the effects are still being monitored.
"Medyo sariwa pa, inoobserbahan pa lang natin dahil ang impact niya ay fro last 2 months pa lamang but ang nafefeel natin its from anywhere within that 40%, 10 to 20% na ang nababawas," he said.
