New construction materials price guide to generate P60B savings - Dizon

Metro Manila, Philippines - A new regional price guide for construction materials in public works projects would address overpricing and result in savings of up to P60 billion in next year’s budget, while still maintaining structural quality, Public Works Secretary Vince Dizon said on Monday, Nov. 3.

In a press briefing, Dizon presented an updated construction material price list in line with the order of President Ferdinand Marcos Jr. to cut costs and prevent corruption in flood control projects, among others.

Marcos earlier directed the Department of Public Works and Highways (DPWH) to reduce materials cost by “as much as 50 percent, which will result in savings in the capital outlay spending of at least P30 to P45 billion pesos.”

Dizon said he had approved the price guide for asphalt and hot mix, steel sheet pile, gravel (grade 1), sand, reinforcing steel bar (grade 60 and 40), cement, and ready mix concrete, adding that prices vary per location.

For asphalt in Mimaropa, for example - where non-existent and substandard projects were flagged - the pricing was substantially cut by over 74% from P23,650 per metric ton to P5,937.

Asphalt prices in seven regions, namely, Metro Manila, Ilocos, Cagayan Valley, Calabarzon, Bicol, Central Luzon, and Soccsksargen, were cut by more than half.

Another notable decrease was the per cubic meter price of sand in Metro Manila from P1,314 to P450, and in Caraga from P1,406 to P506.

In Mimaropa and Caraga, gravel (grade 1) costs were reduced by 57 and 62 percent, respectively.

“Ang utos ng pangulo, ipantay sa presyo ng merkado kasi nga nakita natin ang layo sa presyo ng merkado ng mga presyo…so chineck iyong presyo ng accredited suppliers,” said Dizon.

[Translation: The president ordered the prices to be level to market rates because we found out that the prices were too far from it. So we checked the prices of accredited suppliers]

The secretary said the prices would cover projects in 2026 and those that have yet to be awarded this year.

What the new prices could do

With the new rates per region, Dizon said DPWH offices should now have lower costs in coming up with project estimates.

“Automatic na ‘yan. Kapag binaba ang presyo ng materyales, ‘yung tinatawag nilang actual budget of the contract - meaning kapag ikaw ay nagpa-bid ng kalye, iyon automatic, bababa iyon. ‘Yung estimate ng ahensya…makakatipid na agad ang gobyerno doon” he explained.

[Translation: That’s automatic. When the prices of materials go down, what they call the actual budget of the contract also goes down. Meaning, when you bid for a road project, that automatically decreases. The agency’s estimate…the government can really save up.]

Dizon said the lower prices will not compromise the safety of DPWH projects as the agency is strengthening quality control.

“This would really do a lot to curb corruption but still maintain quality. If the private sector can build roads at those prices, why cannot the government do the same. Walang rason kung bakit hindi (there’s no reason we cannot). No other reason except for corruption,” he said, stressing that this could be the biggest single reform in DPWH.

The Cabinet official said based on agency estimates, the savings from lower material costs could be spent to build 1,600 kilometers more concrete roads and 1,000 kilometers more asphalt overlay.

Dizon said the agency is finalizing prices for other materials, such as those for classrooms and health care facilities.