Wants higher safeguard duty instead

Local cement manufacturers have asked the Department of Trade and Industry (DTI) to postpone the reduction of the P10 per bag definitive cement safeguard duty and instead raise it to P12 per bag.

The twin-objective appeal letter was submitted to DTI Secretary Ramon M. Lopez by Cement Manufacturers Association of the Philippines (CeMAP) Executive Director Cirilo M. Pestano II.

Under the DTI order on August 27, 2019, the P10 per bag definitive safeguard measure on imported cement from specific countries will decrease by P1 per bag each year until the third year. The duty was scheduled to go down to P9 per bag by November 22, 2020. DTI Undersecretary Ruth Castelo said they are still studying if the duty can suspend or minimize the cement safeguard measure.

Instead of reducing the import duty on imported cement, CeMAP also appealed in its July 28, 2020 letter for the DTI Secretary to consider raising the punitive tariff by P2 to P12 per bag.

“If at all possible, we appeal to also consider adding P2/bag or increasing the duty to P12/bag which is the equivalent duty during the provisional safeguards period and is within the recommendation of the Tariff Commission. We believe that such an action is well within the authority of the DTI Secretary as provided for by law,” said CeMAP, which is largely composed of major global cement companies.

In submitting this twin-objective petition, CeMAP cited the positive impact the safeguard measure has brought to the local cement manufacturers operations.

CeMAP said the implementation of the safeguards measure produced a slowdown on cement import arrivals during the second half of 2019 and has helped the domestic cement industry to level the playing field.

But they also claimed that cement imports seemed to be bouncing back in the first half of 2020. It cited data from the Bureau of Customs showing a sequential 14 percent increase in cement importation, while the total cement industry growth is estimated to be on the negative terrain. The CeMAP letter did not specify the decline in its sales or production though.

CeMAP blamed the current trend to higher cement surplus and lower freight cost from countries like Vietnam, the country’s major source of imported cement.

It noted that Vietnam did not impose any hard lockdown during the entire pandemic period, unlike the Philippines where Luzon and Davao plants ceased to operate during the Enhanced Community Quarantine period.

Because of these factors, CeMAP expects “an influx of low cost imported cement in the coming months to the detriment of the local cement industry, and thus contrary to the objectives of the safeguard measures imposed.”

CeMAP warned that reduction in the import duty “will pose greater injury to the already battered domestic cement industry caused by the COVID-19 pandemic. Therefore, we humbly request for the postponement of the reduction of the current P10/bag tariff imposed on imported cement.”