Substandard imports are threatening the existence of legitimate cement companies in the Philippines. If left unchecked, the shipments could render the billions of pesos invested by Philippine cement companies to waste and steal Filipino jobs.
A group of importers challenging a recent order by the Department of Trade and Industry to require cement importers to comply with the Import Commodity Clearance regime has triggered a war in the billion-peso cement industry.
The importers do not want to be covered by the ICC requirement, saying local cement manufacturers are also importing from other countries but are not subject to the DTI directive. The department, however, said local manufacturers were using their local brands for their import, and were thus risking their reputation and market share if the cement they import turned out to be substandard or even expired.
This is a risk that importers do not face because they merely act as middlemen who do not put their companies’ names on the cement label. The DTI actually made the right intervention to protect consumers from inferior and substandard cement products but, more importantly, preserve local jobs and businesses.
The local cement companies have invested billions for their production plants, injecting much needed capital to support the Philippine economy.
Local cement investors created jobs during plant construction and actual operations. These are permanent, competitive and good paying jobs that have partially addressed unemployment in the Philippines.
“If we allow unbridled competition from foreign suppliers through their agents (or importers), we are endangering not only the consumers but our very own local industries,” one industry executive said.
The Philippines has one of the weakest industrial bases in Asia. “We have a very small manufacturing base which is one of the reasons why we can’t achieve industrialization. If we allow the cement industry to face unfair competition from foreign manufacturers, we might as well kiss another industry goodbye,” the executive said.
The Philippines can allow imports, especially when supply is tight. But it must ensure that any imported cement are of good quality by requiring the importers to comply with the ICCs that involve quality inspection by a third party right where the cement is being manufactured overseas.
“With the ICC requirement, we can ensure accountability because we will know that the importers sourced their cement from legitimate and quality producers that comply with international quality product standards,” the industry executive said.
Infra sector in peril
The inferior quality of imported cement and that of steel can have a disastrous effect on the construction sector and the economy as a whole. A consumer welfare advocacy group earlier sought tougher government action against the proliferation of imported substandard construction materials currently flooding the local market.
“Government indifference to the unabated importation of low quality construction materials specifically cement and steel could embolden unscrupulous traders to capitalize on this irregularity even at the extreme prejudice of the integrity of the Philippine construction industry,” said Oliver San Antonio, spokesman and counsel of the National Coalition of Filipino Consumers.
San Antonio cited recent news reports about alleged foreign-made adulterated cement and substandard steel being sold in the domestic market.
“Cement and steel form the very foundation of our houses and buildings. Our government must ensure that substandard imported materials do not contaminate local supplies, especially since there has been a spate of destructive earthquakes and typhoons recently,” San Antonio said.
He noted that the Philippines is located in an earthquake and typhoon zone, making it one of the most disaster-prone countries in the world.
“This is why it’s extremely vital that we use only the best building materials to ensure public safety,” San Antonio added.
In December 2016, the Philippine Iron and Steel Institute, the umbrella organization of the local steel industry, revealed that “substandard and uncertified steel bars” were used in the buildings that were damaged during the 2013 Cebu and Bohol earthquakes.
Substandard cement and steel were reportedly procured from China and Vietnam.
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