Two laws —Tatak Pinoy Act and New Government Procurement Reform Act — will help spur the recovery of the cement industry, according to the Cement Manufacturers Association of the Philippines (CEMAP).
This was the industry position presented by CEMAP President John Reinier during the 71st Asia Cement Producers Amity Club (ACPAC), held last week in Manila.
Dizon, also the conference chairman stated that under those laws, government is bound to give preference and priority to locally made goods and services in government procurement.
CEMAP expressed hope growth will be driven by public infrastructure which accounts for 40 percent of cement consumption.
“The implementation of Tatak Pinoy Act and New Government Procurement Reform Act is being done in phases to allow adjustments and ensure a whole of-nation, a whole-of-government approach that will empower domestic enterprises. This support from the government is crucial for the sustainable development and recovery of the domestic cement industry,” the paper stated.
While the report did not indicate projections for the year, it noted that the total installed domestic capacity of 51 million metric tons per annum (MTPA) of cement is well above the estimated demand of 35 MTPA.
“Cement demand growth has also been sluggish due in part to high interest rates, delays in
government projects, and high vacancy rates of condominiums and office building,” the report added.
Signed into law by President Ferdinand Marcos Jr. on February 26, 2024, the Republic Act (RA) 11981, or the Tatak Pinoy Act soght to promote locally made products as symbols of quality, innovation, and sustainability. It supported local domestic industries and encourages them to develop a domestic market base and expand into exports to discourage talent migration.
Meanwhile, RA 12009 was signed into law on July 20, 2024, enhancing the decades-old RA 9184, or the Government Procurement Reform Act, by modernizing and increasing the transparency of government procurement process.
“The sector is navigating through overcapacity, rising import pressures, and a strong push for sustainability,” the report said.
CEMAP saw growth to be driven by public infrastructure through Build Better More where 207 flagship government projects with aggregated indicative cost of P10.4 trillion have been identified.
“Cement demand from government infrastructure projects accounts for 30 to 40 percent of market consumption, CEMAP said.
Another growth driver, CEMAP said, is private residential construction due to the housing backlog.
The group added commercial and industrial projects will also push cement demand.
According to the industry report, local cement manufacturers have invested in new capacity and sustainability initiatives
Despite an overcapacity, cement imports particularly from traders have continuously increased from 5.2million tons in 2019 to 7.6 million tons in 2024, or a compounded growth rate of 8%.
The import surge is hurting the domestic industry as it directly impacts overall capacity utilization, and it also creates price suppression, according to CEMAP.
The Department of Trade and Industry has on its own initiated investigation into cement imports and has imposed provisional safeguard duties of P400/t ($7.1/t). The case is currently undergoing review by the Philippine Tariff Commission.
Source: https://malaya.com.ph/business/corporate/cement-makers-rely-on-govt-procurement-tatak-pinoy-appeal/
