Anticompetitive deals seen in cement

The Philippine Competition Commission (PCC) discovered in its ongoing full administrative investigation “indications of anticompetitive agreements” in the local cement industry, top officials told reporters on yesterday.

Antitrust body commissioners said in a press briefing in Manila that PCC’s competition enforcement office was pursuing the investigation, which was prompted by an affidavit-complaint filed by a former top official of the Department of Trade and Industry (DTI) last year.

“The competition enforcement office has seen indications of anticompetitive agreements that they are continuously studying and investigating to establish their theory of what has happened or what is going on in the cement industry,” said Commissioner Johannes Benjamin R. Bernabe in a mix of English and Filipino.

Mum on the finer details of the case, Bernabe said that the enforcement office would later on decide whether or not there was enough evidence to merit the office to submit the case to the PCC commissioners for adjudication.

In August last year, former trade undersecretary and now Laban Konsyumer Inc. president Victorio Dimagiba filed an affidavit-complaint in PCC against the Cement Manufacturers Association of the Philippines (Cemap), led by its president Ernesto Ordoñez, LaFarge Holcim Philippines Inc. and Republic Cement and Building Materials Inc.—all of which were accused of anticompetitive behavior.

This led to a preliminary inquiry that later on developed into a full administrative investigation after the watchdog found reasonable grounds for a more thorough probe.

Generally speaking, the commissioners said that an investigation would be done within a two-year period. In the case of the cement industry, the investigation began in January.

On the sidelines of the briefing, Commissioner Stella Alabastro Quimbo said the investigation could lead to penalties filed not only against those cited in the affidavit-complaint, but against other players as well, especially since the probe involved the entire cement market.

“if that ever happens, we have due process. This means [the other stakeholders] would know. If they are not included in the original verified complaint, at a certain point, they would be given a notice and they would be given a chance to explain themselves,” she said in a mix of English and Filipino.

She added that the investigation also included the impact of a controversial DTI administrative order issued last May that drew complaints from some cement importers in what was alleged to be biased toward cement manufacturers.

DTI’s DAO 17-02 requires cement imports to secure an import commodity clearance (ICC), except for those imported by cement manufacturers with an operating integrated cement plant.

Quimbo said that the probe would study this department order since it was an “important shaper of industry practices,” but stopped short of saying if PCC would issue an advisory regarding the department order.

In a statement yesterday, DTI reiterated its defense of its controversial administrative order despite claims it was discriminatory and unfair, noting that this would protect consumer welfare and even support disaster preparedness initiatives.

“Whether addressing the quality of cement or steel products, the government needs to ensure the healthy state of the construction industry as our partner in the Build Build Build Program to create the Golden Age of Infrastructure,” DTI Secretary Ramon Lopez said.