Cement makers: Battle half won

Cement manufacturers are not ready to claim complete victory after the Tariff Commission ruled to impose anti-dumping duties effective for five years on specific Vietnamese companies selling their products locally at cutthroat prices.

An industry official said cement makers still need safeguard measures on all imports to keep their costly adjustment program on track.

The ruling issued last 12 October came on the heels of a 5 October TC decision not to extend the safeguard measures that will end on 22 October.

“Yes, the TC favorably granted petitioners an anti-dumping trade remedy for five years. The safeguard measure extension petition, however, was denied which domestic players believe is premature,” the Daily Tribune’s industry source said.

“Players are fulfilling their adjustment plans in investing and increasing capacity. There is certainly an imminent threat of serious injury as the country is naturally attracted by surplus capacity from its neighbors,” the source added.

Local factories can benefit fully through both options being undertaken simultaneously to ward off the lopsided competition from cheap imports.

“Safeguard measures and anti-dumping tariff are two different remedies allowed under World Trade Organization rules. They could be approved and applied at the same time,” according to the source.

Relief vs surges

Using safeguard measures will provide affected domestic industries with relief against import surges.

“It levels the playing field temporarily as it gives domestic industries time to prepare and adjust to global competition,” according to the industry official. The two remedies are among the three options against the influx of cheap imports.

Those options are the safeguard duty imposed when there is proven injury to the local industry caused by an import surge like in cement; an anti-dumping duty that counters dumped price where the imported price is lower than the wholesale price in the country of source; and a countervailing duty made available when the product brought to the Philippines sells at low prices because of state subsidies.

Anti-dumping levy is designed to stop the unfair practice of selling exported products to the Philippines at prices lower than that in the country of origin. “It is essentially cheating,” the source pointed out.

The continued influx of imports and dumped prices by certain Vietnamese exporters retards the growth of and injures the domestic industry, the source pointed out, adding it also makes the country reliant on imports.

“This, in the long run, affects fair market competition, the ability of the local industry to contribute to inclusive socio-economic growth, and worse, causes the demise of an industry similar to rice and sugar which the country now imports.”

In a report issued on 17 January 2019, the trade department found that increased imports of cement have caused serious injury to the local industry.

The DTI issued Department Administrative Order 19-02, series of 2019, which provided that provisional safeguard measures in the form of cash bonds amounting to P210 per metric ton shall be imposed on imported cement for 200 days.

Modified duty

One year after the imposition of the definitive safeguard duty, the DTI issued DAO 20-08 on 26 October 2020 which raised the duty for the second year, from P225.00/MT or P9.00/40-kilogram bag to P245/MT or P9.80/40-kg bag.

In modifying the safeguard duty, the DTI opined that “the market share of locally produced cement was displaced even with the imposition of a definitive safeguard duty which resulted in the domestic industry’s increased inventory, reduced capacity utilization, and decline in profitability.”

On 7 December 2020, the BoC issued CMO 29-2020 for the imposition of the modified safeguard duty. Then, on 17 February 2022, then Trade and Industry Secretary Ramon Lopez referred to TC a petition for the extension of the imposition of safeguard measures against importations from various countries of Ordinary Portland Cement Type 1 and Blended Cement Type 1P, under Section 19 of RA 8800.

The petition for extension was filed by the Cement Manufacturers Association of the Philippines, represented by four of its member firms, namely CEMEX Holdings Philippines — APO Cement Corporation and Solid Cement Corporation; Holcim Cement Philippines; and Republic Cement & Building Materials Inc.

@tribunephl_cloz @tribunephl_raf

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