Local demand for cement is projected to decline this year as construction of government projects slows amid a tighter spending plan following a massive corruption scandal, according to the Cement Manufacturers Association of the Philippines Inc. (CeMAP).

CeMAP president John Reinier Dizon said the cement industry is expecting a “single-digit” drop in demand this year as the government scales back big-ticket infrastructure development projects.

CeMAP estimates that government spending accounts for around 40 percent of sales volume for cement and construction materials.

This demand has largely been absent in the first quarter following the government’s move to recalibrate spending by the Department of Public Works and Highways (DPWH), the agency at the center of last year’s flood control scandal.

“What they’ve done is they did some cleaning up, and they also got new people. Now, they’re also stricter, [while] the budget was also reduced,” Dizon told reporters.

The DPWH received a total allocation of ₱529.6 billion for the year, down by more than half from last year’s spending haul of ₱1.11 trillion, amid efforts to curb corruption and promote greater transparency.

Still, this would not be enough to propel cement demand, as private construction activity has likewise weakened, coinciding with the increase in construction material prices.

“The individual homebuilders, there’s some demand. But big developers, not so much, we’re not seeing that yet,” Dizon said.

The latest Philippine Statistics Authority (PSA) data showed that year-on-year growth of the construction materials retail price index (CMRPI) in National Capital Region (NCR) rose to 1.7 percent in April from 1.3 percent in March.

Masonry materials, which include cement, registered a faster annual increase of 1.9 percent compared with the previous month’s 1.5 percent.

“People are just waiting a little bit now [on their construction projects] because there’s the [Middle East] war, there’s inflation,” Dizon said.

While the outlook is relatively dim this year, he said demand should improve next year since it is a pre-election year, when development of government projects typically accelerates.

To encourage higher demand in the country, CeMAP is urging the government to favor locally produced cement in infrastructure projects over imports, which are now entering the local market at a rapid pace.

CeMAP is in the early stages of its request to the Department of Trade and Industry (DTI) to consider another safeguard duty on cement imports, potentially covering other source countries and introducing a threshold system.

In October last year, the DTI imposed a temporary safeguard duty of ₱349 per metric ton (MT) on ordinary Portland cement type 1 and blended cement for a period of three years to protect the local industry from the influx of imports.