The Department of Trade and Industry (DTI) has taken a firm step to protect local cement manufacturers in the wake of reports that imported cement has been flooding the local market in recent months.
DTI Secretary Ramon Lopez said his agency will impose a provisional safeguard duty of P8.40 per bag of imported cement after its own investigation found out that there are clear elements of a surge in cement imports, which will cause injury to local manufacturers.
“With the elements of surge and injury clearly established, DTI is mandated to impose a safeguard duty,” Lopez said.
“DTI is thus imposing a provisional safeguard duty of P8.40 per bag,” the trade chief said, adding that this is equivalent to about 4 percent of a typical 40-kilogram bag of cement being sold at P220.
“DTI is thus imposing a provisional safeguard duty of P8.40 per bag.”
The department was expected to release its findings and decision earlier, but it delayed the issuance after the trade head met the importers’ group.
Importers claimed that they did not pose any threat to local cement manufacturers, as their share in the local supply remains low.
Data given by the Philippine Cement Importers Association (PCIA) based on DTI-Bureau of Import Services showed that of the total 28.56 million metric tons of demand in 2017, local manufacturers supplied 25.58 million MT (metric tons) while importers supplied the remaining 2.98 million MT.
When asked if the P8.40 tariff rate per bag is the same amount the DTI was originally eyeing before he met with importers, Lopez replied “no comment”.
“In the case of cement manufacturing, imports of cement increased from only 3,558 metric tons in 2013 to more than 3 million metric tons in 2017; and the share of imports (from non-manufacturer or “pure” traders) increased from only 0.02 percent to 15 percent during the same period,” he cited.
“Equally important, the industry experienced a sharp decline in income (earnings before interest and taxes) of 49 percent in 2017,” Lopez added.
“The industry experienced a sharp decline in income of 49 percent in 2017.”
But the importers claimed that cumulative profits of listed cement firms in 2017 based on their disclosures with the Philippine Stock Exchange reached P7.3 billion.
“Again, this is a provisional duty (effective for 200 days) in the form of cash bond on imported cement, while Tariff Commission undertakes and concludes its formal investigation,” he noted.