The Tariff Commission (TC) should hike the safeguard duty for imported cement to protect the local industry.
The Cement Manufacturers’ Association of the Philippines (Cemap) made the call in response to the continuing surge in cement imports.
In a hearing in Quezon City on Monday, Cemap Executive Director Cirilo Pestaño 2nd said cement imports kept rising in the first quarter despite the imposition of the provisional safeguard duty.
The 4-percent cement safeguard of P8.40 per 40-kilogram (kg) bag was ordered by the Department of Trade and Industry (DTI) in January and took effect starting February 9. It was imposed to regulate the entry of cement imports in the local market and protect the local players.
Citing government data, Pestaño said cement imports rose by 64 percent to 1.74 million metric tons (MT) in the first quarter from 1.06 million a year ago. “Our appeal, therefore, is for a higher … tariff rate to cure the serious injury,” he said.
He backed DTI’s call to expand production capacity to meet the cement demand of the country, which is seen to reach 52 million MT by 2025 as the government pushes an aggressive infrastructure drive.
“There are pipeline capacity expansion projects by several cement companies. Some of which have been commissioned while some are scheduled for commissioning in 2019,” he said.
“Cement demand from infrastructure is expected to comprise 33 percent of total cement demand by 2021, up from 2016’s share of 27 percent,” Pestaño added.
Encouraging firms to expand capacity would have a positive impact to economy, he said, citing P5-10 billion investment spending, P950-million tax revenue and job creation of 4,500 to 6,500, among others.
Republic Cement Services, Inc. President Nabil Francis, who also attended the hearing, said the cement safeguard duty should be permanent and firms should focus on raising production capacity.
“We trust that the Tariff Commission will take the right decision to impose the safeguard as a permanent tariff in the industry,” he said.
Republic Cement Vice President for Strategy and Business Development John Reinier Dizon, meanwhile, said the surging imports affected their operations. They recorded a net loss last year, he said.
The regulated entry of cement imports would allow more time for local manufacturer to gain more plant upgrades to meet the demand, Dizon added.
For his part, TC Member III Ernesto Albano said, “there is a link between imports and this injury specified.”
On the other hand, Laban Konsyumer President Victorio Dimagiba renewed calls to impose suggested retail price for cement products amid the safeguard duty to protect the consumers. “At the end of the day … we have taken a position that this is just a strategy to increase prices to the prejudice of the consumer,” he said.
Meanwhile, DTI Bureau of Import Services Director Luis Catibayan said prices remained stable despite additional tariff on cement imports as of March.