Local cement makers warned yesterday that the Tariff Commission’s decision to end the safeguards on the domestic industry will discourage investments and may result in massive layoffs when local factories cut down on costs.
The influx of cheap cement primarily from Vietnam had placed in jeopardy the P60-billion expansion and modernization program of the industry.
On 5 October, the TC released a report recommending not to extend the safeguard tariff on cement mainly coming from Vietnam.
The punitive tariff ends on 22 October and local manufacturers under the Cement Manufacturers Association of the Philippines or CeMAP are now weighing their options after the extension of the safeguard was rejected.
An industry official said the TC decision merely reinforces import dependency which “is not good for our economy.”
The high-ranking Daily Tribune source said allowing massive importation will result in significant dollar outflows while helping the economy of other countries.
Dumping prices
Based on Bureau of Customs data, some 91 percent of imported cement comes from Vietnam at impossibly low prices meant to eliminate local manufacturers.
The official added that relying on imports despite the capability of local industries will mean lost job opportunities.
“It is like giving away jobs that should have benefited Filipinos to Vietnam and other exporting countries,” the official pointed out.
The official lamented that the government is allowing imports to compete unfairly with local produce since the country has abundant mineral resources for cement production.
“More taxes should be earned by our government from our domestic industry. We need to be more patriotic if we want our country to progress,” the executive added.
The continued dumping of cement imports from Vietnam has resulted in material injury to the domestic manufacturers contrary to the findings of the TC that the local industry has positively adjusted to imports.
The volume of sales, as well as the pricing of local manufacturers, were severely affected by cement imports from Vietnam.
The official said that while pricing is a function of demand and supply, the cement prices are affected by imports, dumped cheaply across the country. Local cement makers are facing the high cost of energy mainly from coal and other fuels that make up around 70 percent of production cost.
Lost revenues
Daily Tribune’s source said the local industry cannot pass on the cost to consumers because of the stiff challenge coming from dumped cement from Vietnam.
Local manufacturers are losing revenues and sales volumes.
“Revenues are suppressed because of imports at dumped prices,” the official explained.
CeMAP said as of last year, Vietnam accounted for 91 percent of cement imports to the country in terms of volume and value, which is a growth from 61 percent in 2017 and almost no imports in 2013.
CeMAP found the increase in cement imports from Vietnam has grown faster than the year-on-year local output.
A chart presented by CeMAP showed cement imports grew from 2.486 million metric tons in 2017 to 5.396 MMT in 2020 and 6.466 MMT in 2021.