Philippine cement makers are banking on a pickup in government infrastructure spending to stabilize demand at about 34 million tons this year, as the industry grapples with excess capacity, high energy costs, and a weaker peso.
Reinier Dizon, president of the Cement Manufacturers Association of the Philippines (CeMAP), said cement demand remained 2 to 3 percent below last year’s level through September, although a stronger fourth quarter could narrow the gap.
“We see the market, hopefully, will be flat this year versus last year,” Dizon said, stressing that the assessment reflected industry sentiment rather than a formal forecast.
The industry has 52 million tons of installed domestic production capacity, leaving a sizable gap between potential output and actual consumption.
Dizon said the resumption of legitimate Department of Public Works and Highways projects, alongside tighter controls and monitoring following the flood control scandal, could provide a much-needed lift to cement demand.
Private construction, meanwhile, was expected to remain broadly steady.
The industry continues to contend with elevated production costs, with energy accounting for about 60 to 70 percent of manufacturers’ cash expenses. A weaker peso has compounded the pressure by making imported fuel and other inputs more expensive.
Still, safeguard duties have helped local producers regain market share from imports. Dizon estimated cement imports had dropped by about 30 percent this year and could reach an annualized 4 million tons.
The decline in imports, however, has not resolved the industry’s excess capacity problem. Manufacturers continue to adjust production to demand while looking for ways to lower costs.
Producers are investing in alternative fuels, solar power and waste heat recovery to reduce energy consumption and improve efficiency.
Dizon also urged stronger government support for locally manufactured cement, citing its role in sustaining jobs, domestic investments and supply chains as infrastructure spending remains a key source of potential growth.
