The Cement Manufacturers Association of the Philippines (CeMAP) said it expects pre-election spending to boost cement demand in 2027, even as consumption is seen staying flat this year. Cement demand is closely watched as a barometer of construction activity, since the material underpins infrastructure, housing, and commercial projects.

"Next year is a pre-election year and government infrastructure spending is typically higher," CeMAP President John Reinier H. Dizon told reporters on Thursday on the sidelines of the Federation of Philippine Industries, Inc.'s Business Summit.

Mr. Dizon said demand is expected to remain flat this year, weighed down by the Middle East crisis and the weaker peso. "The market, hopefully, will be flat this year versus last year," he said.

Construction activity typically accelerates ahead of national votes, as projects seek to wrap up before the government imposes a 45-day spending ban in the run-up to an election, a measure that restricts public works activity in the final weeks before voting. In 2025, an election year, cement demand stood at 34 million metric tons.

Mr. Dizon said the cement industry is still expanding, although building new capacity takes time and may not be reflected immediately in the industry's results. "I think there's still some ongoing expansion, but there's a gestation period," he said. "To build a cement plant, it takes four years. But it's a very capital-intensive industry, and investors have to be really comfortable." That gestation lag means current industry results largely reflect capacity decisions made years earlier rather than recent demand swings.

He also pointed to weak building permit figures as a reflection of private-sector sentiment. The Philippine Statistics Authority reported that building permits slumped 31% in August to 10,968 approvals. Permit approvals serve as a leading indicator for private construction, since they typically precede groundbreaking.

Despite the soft patch, CeMAP remains optimistic that demand will pick up by year's end. "Our outlook and sentiment for Q4 should be better than last year's," Mr. Dizon said. Monthly building permit releases and infrastructure disbursement reports will provide early readings on whether that pickup materializes heading into the 2027 pre-election period.

Infrastructure spending dropped 16.9% to P70.5 billion in August, as disbursements by the Public Works department slowed after the flood control corruption scandal of 2025. — Beatriz Marie D. Cruz

Source: BusinessWorld