The Philippines has expanded the list of countries covered with the safeguard measure on cement importation with additional 13 countries, including Indonesia, as sourcing of cheap cement may have been diverted to countries previously exempt from the safeguard duty.
The Department of Trade and Industry (DTI) issued on March 3, 2021 Department Administrative Order (DAO) 21-20 amending Annex A of the previously issued DAO on cement safeguards. Annex A is a list of developing countries excluded from the safeguard measure that meet the de-minimis level of import volume share (less than 3%) to total cement importation.
The exclusion from the safeguard measure of developing countries is provided under the law and the WTO Agreement on Safeguards.
The delisting of the 13 countries from the previous Annex A was based on the DTI annual review of recent available import data wherein the agency found that some countries listed previously already have a share to total cement imports that has exceeded the 3 percent threshold.
Further, the DTI also recently reviewed the status of certain countries/economies to be considered as “developing” and noted that a few of them are considered high income economies (based on World Bank data), score very high in the human development index, and are members of the Organization for Economic Co-operation and Development, an organization comprised mainly of high income developed countries/economies.
For these reasons, the DTI delisted countries meeting these criteria from Annex A. The countries that have been delisted are Chile, Israel, Slovenia, Slovakia, Poland, Lithuania, Latvia, Hungary, Estonia, Czech Republic, Republic of Korea, and Indonesia.
This means, cement importations from these 13 countries will be slapped with the safeguard duty of P9.80 per 40-kilogram bag of cement upon the issuance of Customs Memorandum Order or 15 days from its publication in two newspapers of general circulation.
An official source called the surge in importation from these countries “trade diversion” tactics by importers since these countries were exempt from the safeguard duty previously.
In December last year, DTI Secretary Ramon M. Lopez issued DAO No. 20-08 series of 2020, which imposed a P9.80 duty per 40 kg bag on imported or p245 per metric ton
for the second year (from October 22, 2020 to October 21, 2021) of the three-year implementation period of the safeguard measure against imported cement.
It could be recalled that on August 27, 2019, DTI issued DAO No. 19-13 imposing a definitive general safeguard duty on imported cement for an initial three-year period to stop the surge of imported cement to the country after final determination that the surge in importation has caused serious injury to the domestic industry.
The DAO provided for a staggered reduction of the punitive duty. On the first year, the DTI imposed a duty of ₱250 per MT or ₱10 per 40 kg bag, for the second year ₱225 per MT or ₱9 per bag, and for the third year ₱200 per MT or ₱8 per 40 kg bag. The DTI DAO also provided for a regular review of the safeguard measure allowing the DTI to modify the rate as necessary.