MANILA, Philippines — Local cement manufacturers have abandoned their growth projections for the year as a massive slowdown in state-backed construction projects continues to ripple across the industrial sector.The Cement Manufacturers Association of the Philippines (Cemap) revealed that the industry has yet to see a meaningful demand recovery, even after passing the dry season’s peak building window.
The lingering slump is a direct byproduct of a multi-billion-peso public works graft investigation that continues to freeze capital deployment across the countryside.
Government infrastructure outlays serve as the lifeblood of the domestic building materials sector, making up a massive 40 percent of total national cement demand. However, state spending has plummeted following intensified project audits:
[2025 Multi-Billion Flood Control Scandal] ──► Triggers Tightened Oversight & Bureaucratic Freezes │ ▼ (The 2026 Fiscal Slump)[Infrastructure Capital Outlays Plummet 48%] ◄── March Single-Month Spending Drops to ₱59.1 Billion │ ▼ [Cemap Projects 2026 to End with a Single-Digit Market Contraction]
Data from the Department of Budget and Management (DBM) underscores the severity of the infrastructure freeze, showing that total first-quarter infrastructure spending dropped by 43.5 percent to ₱147.8 billion. Furthermore, the Department of Public Works and Highways (DPWH) was allocated just ₱529.6 billion for 2026—a steep reduction from its original ₱881.3-billion proposed modernization blueprint.
The construction dry season (traditionally running from February to May) normally buffers the industry, but Cemap President Reinier Dizon—who also serves as president of Republic Cement and Building Materials Inc.—noted that private sector projects are missing as well:
[ COMPOUNDING SECTOR PRESSURES ]
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[ SHRINKING CONSUMER CONFIDENCE ] [ FOREIGN IMPORT FLOODING ]
• **The Inflation Bite:** High energy prices linked to global Middle • **Duty Loopholes:** Cheaper foreign cement continues to flood
East conflicts pushed April inflation to a 3-year high of 7.2%. local ports despite active state safeguard duties.
• **Household Hesitation:** Volatile consumer costs are forcing commercial • **Uneven Protections:** Dizon flagged that current safeguard
developers and households to suspend non-essential expansions. tariffs do not cover all major exporting nations.
While the remainder of 2026 is modeled for a flat-to-negative finish, manufacturers are setting their sights on next year to stabilize corporate bottom lines.
| Fiscal Timeline | Projected Construction Drivers | Regulatory Impact Parameters |
| Mid-to-Late 2026 | Anticipated normalization of delayed DPWH capital rollouts. | Planners hope state auditing friction clears up by the start of the third quarter. |
| Full-Year 2027 | Massive injection of pre-election campaign infrastructure spending. | Standard election laws prohibit new social public works during official campaign weeks, but ongoing projects may run at peak volume. |
“They’ve tightened, but hopefully starting toward the end of the second quarter, beginning of the third quarter, they’ll start spending already,” Dizon stated, emphasizing that industry talks are ongoing with the Department of Trade and Industry to address tariff protections against unfair foreign competition. Until public disbursement mechanisms smoothly untangle themselves from the corruption cleanup, the country’s cement plants will have to brace for an extended period of low capacity utilization.