Labor, cement shortages threaten infrastructure momentum

By Richmond Mercurio (The Philippine Star), Nov 29, 2017

MANILA, Philippines — The Duterte administration’s massive infrastructure program could face setbacks due to shortages in essential construction materials and skilled labor, construction industry officials said.

The country currently has a shortfall in qualified manpower and construction materials needed to cater to the accelerated implementation of infrastructure projects, industry officials from both public and private sectors said.

“The local supply is not enough that is why we encourage imports. Imports are very much needed and we encourage both the manufacturers and the traders to import,” Cement Manufacturers Association of the Philippines president Ernesto Ordoñez said.

“We like imports, not just by the manufacturers but even traders. We welcome it and thank them for it but they must make sure that the cement follows quality standards or else Build Build Build will become die, die, die,” he added.

Last year, Ordoñez said total estimated cement demand reached 26 million tons, 12 percent of which were catered by imports.

Cement imports by traders and local manufacturers stood around 1.6 million tons each.

For the first half of the year, however, Ordoñez said trader imports have already exceeded its full year 2016 shipments at 1.8 million tons.

Trade Undersecretary Ruth Castelo said the country’s cement demand, which is currently growing from six to seven percent annually, is expected to accelerate to eight to 10 percent with the rollout of the projects under the Build Build Build program.

“The industry is waiting, they are very eager, they are itching to build, and they want to start. As a government official, I want to start right away so by the end of this term or at least towards the end of 2022 we will be 50 to 70 percent complete. There must be certain reasons why the projects have not been rolled out yet,” Castelo said.

On the Department of Trade and Industry’s end, Castelo said the agency is making sure that the country has adequate supply of construction materials.

“We have certain technical regulations for standard compliance and then we are ready to import if in case manufacturing in the country would be insufficient,” she said.

Meanwhile, the prevailing mismatch between labor available and the skills required by the construction industry is also posing a problem to the country’s infrastructure program.

According to Castelo, on top of the Build Build Build projects are regular construction programs to be undertaken by various agencies like the Department of Education, Department of Health, and the National Housing Authority.

As of end-July, she said the country has 3.86 million construction workers.

“When we were at 3.3 million in 2016, at that time we need around 2.5 million additional workers for the Build Build Build program but we’re now at 3.8 so we need around two million more. So we are conducting non-stop training and the private sector is helping us,” Castelo said.

The Duterte administration has unveiled a three-year rolling infrastructure program amounting to P3.6 trillion from 2018 to 2020 to usher in what is touted as the country’s golden age of infrastructure.