When the Department of Trade and Industry gives its verdict, likely today, on the recommendation of the Tariff Commission to end the anti-dumping duty on cement, it should consider the lingering condition that prompted last year’s swift government action, industry leaders said.
Last 5 October, the TC issued a report recommending not to extend the safeguard measure to protect the domestic industry from cheap cement imports.
The DTI is reviewing the TC proposal and will come up with a decision after a week which falls today.
On 6 December last year, the DTI handed down a decision to impose a punitive tariff after discovering that nine out of 16 Vietnamese exporters of type 1 cement, and four out of 12 traders of type 1P cement were found to have engaged in unfair practices that caused injury to the domestic cement industry.
The Cement Makers Association of the Philippines which is the umbrella group of major domestic manufacturers said that as a strategic industry, cement should be provided government support. It is a critical input to the infrastructure program and the building of decent homes for ordinary Filipinos which are cornerstones of the administration of President Ferdinand “Bongbong” Marcos, CeMAP added.
CeMAP, which advocates fair competition, believes that the progressive rise in the volume of imported cement, particularly from Vietnam, presents a risk to the country’s economic recovery as it undermines the domestic industry.
Thus, CeMAP said cheap imports impair the capability of the local industry to contribute to and catalyze inclusive growth through job creation, tax revenue generation, improving the balance of payments, utilization of local natural resources, and overall economic recovery and growth.
Poll ban depressed mart
CeMAP executive director Cirilo Pestano said during a TC public hearing that demand has been flat in 2021 and this year mainly as a result of the election ban aside from the lingering effects of the pandemic.
Another challenge is the effect of the Eastern European conflict that resulted to the higher energy cost.
Approximately 70 percent of the cost of manufacturing cement is accounted for by both fuel and electricity.
Local manufacturers are recovering because the economy is opening but, CeMAP warned, all these can be compromised if the safeguard measures are not extended.
“This is a really important support that can be given to the local manufacturing industry as the contribution that we provide is a matter of national interest. It is imperative that the safeguard measures are extended to allow the continuation of the advancement plans that has been started by the domestic cement manufacturers,” Pestano explained.
He pointed out that for local firms to be able to invest more in the Philippines and create more jobs and contribute taxes and deliver socio-economic benefits to the particular communities they operate; protective tariffs should be prolonged.
Lopez moved swiftly
Former Secretary Ramon Lopez acted swiftly to impose provisional anti-dumping duties on specific Portland cement brands imported from Vietnam based on the results of a preliminary determination on the anti-dumping petition filed by Republic Cement and Building Materials Inc., CEMEX — Solid Cement Corporation/Apo Cement Corporation and Holcim Philippines Inc.
CeMAP said the industry was grateful to DTI’s support for the continued modernization and expansion of the cement industry and the generation of more jobs.
Provisional anti-dumping duties on type 1 cement will range from $1.02 per metric ton to $10.53 per MT, or 2.69 percent to 31.87 percent of the export price.
The nine exporters account for 82 percent of total imports of type 1 cement.
On the other hand, provisional anti-dumping duties on Vietnam’s type 1P cement exports ranged from $1.16 per MT to $12.79 per MT, or 3.8 percent to 29.2 percent of the export price.
The provisional duties are estimated to add P2.01 to P25.08 to the import cost of a 40-kilogram (kg) bag of cement but the DTI said the additional cost was not passed on to consumers due to the strong competition in the market.
Lopez then said the competitive environment for cement ensures that pricing and supply remain stable.
“We do not expect the provisional dumping duties to have an impact on the government’s buildout because domestic cement producers can supply the requirements of government projects,” he added.