By Bernie Cahiles-Magkilat
Department of Trade and Industry (DTI) Secretary Ramon M. Lopez has assured consumers that the provisional duty on imported cement will not lead to price increase nor create a shortage of supply in the local market.
“Since local manufacturers are required to keep their current prices, the safeguards will not lead to price increases nor a shortage of cement,” said Lopez.
But traders said that manufacturers already raised their prices starting January 14 by P10 per bag ahead of the decision of the DTI to impose the provisional safeguard of P8.40 per 40 kilogram bag on Thursday.
Lopez said that DTI will continue to monitor cement prices to ensure compliance of this requirement.
The provisional duty will be in effect for 200 days in the form of cash bond on imported cement while the Tariff Commission undertakes its formal investigation.
The secretary highlighted that despite the new safeguards, cement can still be imported with no permits required.
In addition, Lopez defended the imposition of the provisional safeguard saying it is “definitely not punitive” and will not protect companies because it has only an effect of 3.8 percent of current prices.
Rather, he said, the safeguard measure “sends a good signal to any investor and manufacturer to expand.”
The DTI conducted a motu propio investigation on September 1, 2018 due to the increase of cement imports from only 3,558 metric tons in 2013 to more than three million metric tons in 2017.
“The surge in imports is a big concern as we do not want to eventually import everything as we stunt the growth of local manufacturing. This will only widen the growing trade deficit. We have to build capacities for the future especially now that the government has embarked on an aggressive infrastructure development program. Growing capacities also create local jobs that help alleviate poverty. Imports do not create local jobs but help jobs in the source country,” he explained.
“We have to strike a delicate balance. We are not over protecting a local industry. Cement does not have any tariff duty protection, unlike in many agriculture products. Imports are still allowed and do not require any import permit. So we can be sure that imports will continue to play its role in providing alternative sources of cement supply,” he said.
He further added that developing local industries is key to slowly wean the country off its dependence on imports and this is the long-term solution to country’s perennial trade imbalance.
Hence, DTI is focusing on broadening the country’s manufacturing base to meet the local demand and eventually have the capacity to enter the export market.
“The DTI consulted several stakeholders to get all of their insights. In our decision, we aimed to strike a balance between developing local industries and protecting the consumers,” Lopez concluded.