PCA bucks safeguard measures; cement firms told to open books

Published October 29, 2018, 12:00 AM

by manilabulletin_admin

By Bernie Cahiles-Magkilat

Construction contractors are challenging cement manufacturers to open their financial records to show the basis of their claims that imported cement have caused an alleged decline in their earnings.

The Philippine Constructors Association, Inc. (PCA) raised this challenge in a position paper as they opposed move to impose safeguard measures on cement importation.

“Cement manufacturers should open their financial records to once again see the basis of the alleged ‘serious injury’ and what is are truly causing the alleged ‘decline in their earnings,’” the PCA said.

The Department of Trade and Industry (DTI) has opened a Notice Motu Propio Initiation of Preliminary Safeguard Measures Investigation on the importation of cement from various countries (SG Case No. 01-2018) to determine if imported cement has caused “serious industry” to the domestic cement manufacturing industry.

“The PCA an association of construction contractors with membership nationwide, is strongly opposing any intended imposition of safeguard measures on imported cement. While safeguard measures on imported cement will favor local cement manufacturers, it will cause serious injury on the consumers and the contractors all over the Philippines,” the position paper stated.

The group also hit the DTI for believing the cement industry’s claim as gospel truth. “Some figures on alleged decline in their earning were cited which the DTI seem to have accepted as gospel truth. PCA does not agree. There are many factors affecting the numbers in their financial statements,” the PCA stressed.

The constructors noted that the increase in importation in 2014 from the base of 2013 was 70 percent, which increased to 4,391 percent in 2015, then went down to 549 in 2016, then significantly dropped to 72 percent in 2017, which almost approximates the situation in 2014 when DTI imposed Safeguard Measures. Contrary to the allegation of an increasing volume of importation, PCA said there was a continuous downtrend in the last years.

But the PCA also noted that the increase in the volume of imported cement in 2015 was a result of the spike in the price of local cement and the “shortage” thereof in the market. In this time of construction boom, demand for cement, be it local or imported, is continuing and increasing.

“Activities in construction cannot wait for local production in case of shortage (be it real or artificial) and it is seriously unconscionable for the local cement manufacturers to be taking too much advantage of the increasing demand, by resorting to safeguard measures, in the guise of ‘serious injury,’” the PCA position paper stated.

They also warned that a safeguard measures on importation of cement will give local cement manufacturers the upper hand and increase their prices to approximate the price of imported cement.

When this happens, PCA said, this will not only affect consumers but construction contractors as well.

Constructors have reminded the DTI of the previous punitive measure on cement imports, which was reversed by the Tariff Commission.

The Commission found, after reviewing the financial records and after conducting a series of hearings, that no injury was caused by reason of the importation of cement and the government was required to return or refund to the importers, the amount of duties imposed and collected as preliminary safeguard measures. This finding was sustained by the Court of Appeals and the Supreme Court.