The Tariff Commission is expected to release its ruling anytime soon on a petition for a higher and permanent safeguard against imported cement, an issue that involves national interest according to local cement manufacturers and the Department of Trade and Industry.
The TC concluded last month its public hearing on the petition of local cement manufacturers and its chairman, Marilou P. Mendoza, said the agency will come up with its decision by June.
Mendoza said the TC will decide as a collegial body based on its investigation and the evidence and positions the petitioner, Cement Manufacturers Association of the Philippines, and cement importers submitted to the agency during the hearing.
The TC chairman said their task is to determine whether or not the surge in imported cement caused serious injury to cement manufacturers.
“If ever there is serious injury, you have to link it to the importation, so the serious injury should be caused by the increased imports, but not other factors,” Mendoza said in an interview after the conclusion of the hearing on May 21.
In February, the Department of Trade and Industry imposed safeguard measure against imported cement through a 4-percent provisional tariff amounting to P210 per metric ton or P8.40 per bag of the product after finding an inordinate increase in cement imports since 2013 causing manufacturers to lose market share. The DTI move is guided by the Safeguard Measures Act (Republic Act 8800) which protects the domestic industry against import surges.
DTI also found that cement manufacturers’ earnings fell sharply by 49 percent in 2017 while aggregate net income started sliding in 2016 by 29 percent and further by 78 percent in 2017. In the past five years, cement imports soared from 3,558 metric tons in 2013 to more than 3 million MT in 2017 and reaching almost 5 million MT in 2018.
In the first quarter of 2019, the volume of cement imports rose 64 percent to 1.74 million MT from 1.06 million MT in the first quarter of last year prompting CEMAP to call for a higher permanent safeguard.
CEMAP officials have expressed hope the TC will uphold the country’s interests in its ruling on the safeguard measure after the body’s own investigation validated the DTI’s findings of serious injury to local cement manufacturers caused by the “sudden, sharp and significant” increase in cement importation starting in 2016.
“There is reason to believe that this will lead to serious repercussions that will be detrimental to the Philippine economy,” CEMAP Executive Director Cirilo M. Pestaño II had said.
For its part, the DTI stressed that over importation of cement affects the country’s interest as the domestic cement industry plays a vital part in infrastructure development, particularly the government’s “Build, Build, Build” program.
The DTI believes the domestic industry should be able to sustain the program through its own investments and production instead of relying on imported cement, which may affect BBB projects in terms of cost, quality and schedule as price, standards and supply are dictated by the exporting country.
According to the agency, the local cement industry deserves protection to preserve the jobs of 42,000 workers directly employed by manufacturers and another 125,000 indirect jobs in the value chain. Manufacturers should also be allowed to recoup their investments in additional facilities or production lines which cost billions of pesos.
The sector also contributes an estimated P155 billion or one percent of the total gross domestic product (GDP) of the country, as well as tax revenues of around P24 billion annually.
For the long term, DTI said the competitiveness and viability of cement manufacturers will serve as a strong foundation for a highly industrialized Philippines by sustaining infrastructure development and a stronger economy by becoming a major cement exporter.
Relying solely on imports and being at the mercy of global supply and demand condition is “risky and irresponsible,” according to the DTI.