Additional tax on cement imports opposed

Cement importers fear the business would no longer be profitable if the government would insist on further taxing cement imports, which will leave the country less equipped to handle supply shortfall.

Importers get only P8.25 profit margin a bag of cement, according to  data presented by the Philippine Cement Importers Association (PCIA) to reporters.

Cement manufacturers who also import get much more, PCIA said, citing a margin of P25.42 to P67.36 a bag of cement, based on market information and 2017 financial statements.

Cement makers import despite claims that local production is enough to meet demand.

The profit margin of cement importers will likely shrink further if the Department of Trade and Industry decides to push a safeguard measure on imported cement.

“Once there is a safeguard measure, that’s when we’ll decide whether to continue [importing] or not. If there’s no profit, nothing will happen,” said Eduardo Sahagun, president and CEO of Philcement, a Phinma company.

Safeguard measures serve as an emergency relief provided to  the domestic industry that is “seriously injured” by sudden and sharp increases in imports, the DTI said on its website.

Safeguard measures can come in various forms, including an increase or imposition of duty on an imported product.

However, PCIA said it was not certain how local players  got hurt by the import surge, given that they had already accumulated profits over the past few years.

It is also not certain when the DTI will announce a decision on the issue, after it initiated an investigation of the industry without any formal complaint from local cement manufacturers.

Last Friday, Lopez had hinted in a press conference that he was leaning toward the imposition of a safeguard measure, noting that there had been a surge in cement importation since 2013 and that local players got “hurt” in the process.

He said the decision would come out over the weekend, which did not happen.

It was only on Tuesday this week that importers finally got their chance to talk to Lopez about the issue, said Sahagun, a former director of the Cement Manufacturers Association of the Philippines, the group of big cement manufacturers.

“He [Lopez] admitted that some of it (the data) he didn’t know yet. In our case, we said we’ll just accept whatever decision the secretary will [make]. We said everything. There’s nothing more to say,” he said.

While both DTI and PCIA cite the Bureau of Customs as one of their primary sources of data, their framing of the issue showed different pictures.

For instance, in 2016, DTI said importers ordered 1.77 million tons of cement. This, according to DTI, does not yet include the imports of manufacturers.

PCIA, on the other hand, claims that overall cement imports in 2016 — both by importers and manufacturers —  reached 2.49 million tons with local integrated cement plants accounting for 67 percent.