Infra graft weighs down on cement demand
Weaker government infrastructure spending, weighed down by a multibillion-peso corruption scandal, dragged down the construction supplies industry in 2025. Cement makers estimate a 3-percent drop in full-year demand.
Reinier Dizon, president of the Cement Manufacturers Association of the Philippines (Cemap), said demand softened notably in the fourth quarter. This, as scrutiny over government-funded projects tightened and public works spending slowed.
Latest data from the Department of Budget and Management showed government infrastructure and capital outlays plunging 40.1 percent in October. The amount spent settled at P65.9 billion from P110 billion the previous year.
Construction grew by just 0.5 percent in the third quarter, sharply lower than the 9-percent expansion a year earlier. This contributed to a four-year-low gross domestic product growth of 4 percent.
Despite resilience in private-sector construction, Dizon said the industry remains heavily dependent on government spending. He described this as the sector’s “main multiplier.”
“Once they build the roads, they put in all the necessary infrastructure, there’s a domino effect in the economy for housing, for commercial, etc.,” said Dizon, who is also president of Republic Cement and Building Materials Inc.
“Once the government projects kick in, I think that will also restore the private side,” he added.
Heading into 2026, Dizon said the cement industry remains in a “wait-and-see” mode.
He pointed to some bright spots, including the integration of the Philippine Contractors Accreditation Board under the Department of Trade and Industry as well as the signing of the P6.793-trillion national budget.
The Department of Public Works and Highways, the agency at the center of the flood control controversy, received the second-largest share at P530.9 billion. But this was well below the P881 billion initially proposed.
Despite the effects of the corruption scandal rippling through the industry, Dizon said there remained room for cautious optimism this year as the underlying demand for construction remains intact.
“The country remains promising; there’s a lot of infrastructure and housing needs,” he said. “Now, fingers crossed, we just need to build confidence.”
Dizon added that clearer signals for 2026 would likely emerge during the peak construction season from February to April.
