Philippine construction costs are set to come under renewed pressure in the fourth quarter, with Consunji-led Concreat Holdings Philippines, Inc. (CHP) weighing cement price increases of as much as P40 per bag as fuel, power, and raw material expenses climb.

The potential adjustment comes as construction consultancy Hearn & Hearn forecasts further increases in building costs toward year-end, citing elevated oil prices, wage hikes, and the depreciation of the peso. Because cement is a core input across the residential, office, retail, and industrial project types covered in the consultancy's cost benchmarks, per-bag adjustments flow into the same project budgets developers are being advised to revisit.

Cement maker considers staged increases

“We’re looking at a range of P28 to P40 per bag,” CHP President and Chief Executive Officer Herbert M. Consunji told reporters on the sidelines of the SharePHIL Annual General Membership Meeting on Tuesday.

Mr. Consunji said the company is considering rolling out the increases in phases, potentially beginning in mid-November, to avoid a sudden adjustment that could weaken demand.

“Because it can’t be sudden… So it will be in stages,” he said.

He added that CHP must weigh the proposed adjustments against their potential impact on sales volumes, given the price sensitivity of cement demand.

The increases are intended to offset higher fuel, electricity, and coal costs, although CHP has yet to feel their full effect because of its long-term supply contracts.

“We’re not affected yet because we have long-term contracts for supply and so on. But, with all this, [headwinds] we’re planning to increase [prices],” Mr. Consunji said.

He said the company is monitoring developments in the coal market and has yet to finalize the adjustments, which will also depend on market conditions and the prices charged by other cement manufacturers.

In March, CHP implemented phased cement price increases totaling about P30 per bag, or roughly 10%, to offset rising fuel and operating costs. If finalized, the contemplated P28-to-P40 range would come on top of those March adjustments.

CHP produces cement under the APO, Rizal, and Island brands through its wholly owned subsidiaries APO Cement Corp. and Solid Cement Corp.

Construction cost outlook

Separately, Hearn & Hearn said construction cost pressures intensified during the third quarter, driven by higher energy prices, peso depreciation, and increases in labor expenses.

“Construction cost pressures in the Philippines intensified again during Q3 2026. Continued disruption in the Middle East pushed oil prices and inflation higher, the peso fell to record lows, and the National Capital Region (NCR) minimum wage increase took effect late in the quarter,” the consultancy said in its third-quarter insight report.

Headline inflation accelerated to 7.2% in September, while the construction materials wholesale price index in Metro Manila rose 3.4% year on year.

The consultancy also noted that Dubai crude oil prices reached approximately $109 per barrel during the period, while diesel prices in Metro Manila climbed to about P91 per liter from roughly P55 previously. The peso’s slide to P63.23 against the dollar added pressure on the cost of imported construction materials and equipment.

“Looking ahead, construction costs are expected to keep rising through the fourth quarter (Q4) 2026,” Hearn & Hearn said.

The consultancy identified projects in the early stages of design, tendering, and procurement as particularly exposed to further cost increases, as developers have yet to lock in material prices and contractor quotations. Cement purchases fall within the material costs that such early-stage projects have yet to lock in.

Hearn & Hearn estimated construction costs for mid-rise residential projects at P36,755 to P55,905 per square meter (sq.m.), while high-rise residential projects ranged from P45,000 to P80,915 per sq.m. Office construction costs ranged from P42,430 to P70,065 per sq.m., and shopping mall projects from P27,655 to P53,515 per sq.m.

For warehouses, construction costs ranged from P17,005 to P35,675 per sq.m., while hotel developments recorded a wider range of P55,575 to P136,660 per sq.m.

The consultancy advised developers to review project budgets, update supplier quotations, and account for potential increases in material and labor costs when preparing construction schedules and procurement plans.

CHP shares fell 0.91% to P1.09 apiece on Tuesday.

— Alexandria Grace C. Magno and Juliana Chloe A. Gonzales, BusinessWorld

Source: BusinessWorld