Housing developers alarmed by cement price hike

MANILA, Philippines — Housing developers have expressed alarm over the hike in the prices of cement.

The Organization of Socialized and Economic Housing Developers of the Philippines (OSHDP) and the Socialized Housing Alliance Roundtable Endeavour (SHARE), an association of non-government organizations (NGOs) engaged in housing development,  said the price hikes as well as the shortage of the commodity in certain areas and shift in payment terms to cash payments for cement purchases are causes for concern.

OSHDP president Jefferson Bongat said cement is the basic building block for the manufacture of houses and for subdivision development of roads.

Prices of bag cement spiked to P225 from P205 in the last two weeks.

Housing developers were surprised about this development as cement prices were fairly stable in 2015 and 2016.

The government’s housing program is now threatened with this development, as both the government and private sector are bent on curbing the massive housing backlog of 6.5 million housing units.

They claimed that the situation exacerbates the fact that the Housing and Urban Development Coordinating Council (HUDCC) even increased the minimum floor area requirements for socialized housing to 24 square meters from 18 sqm when it adjusted the price ceilings for socialized housing,

Local cement manufacturers said cement supply would remain sufficient for the Build Build Build program but for now, it is not clear whether the industry can serve the needs of the housing and real estate sector.

For his part, SHARE president Marcelino Mendoza said socialized housing is a very low margin undertaking that spikes in prices, delays caused by material shortages and ability to purchase on credit impact a lot on the ability of housing developers and housing NGOs to remain viable.

“In fact, the socialized housing sector has long advocated for the operationalization of the one-stop-shops or an express lane for government permits processing, the absence of which, contributes a lot to long project deliveries and increased cost,” Mendoza said.

The two groups said additional tax on cement imports would also aggravate the situation.

“This will result eventually in additional cost to be shouldered by housing beneficiaries. Construction materials used in manufacturing low cost housing should not be subjected to new taxes,” the two housing groups said.

They appealed to the government to balance the interests of local cement manufacturers and cement importers.

In crafting policies, OSHDP and SHARE strongly urge that the government to consider the plight of socialized housing manufacturers and beneficiaries and provide solutions to the current critical situation in the cement industry.