Groups say DTI’s tax on cement imports may hurt socialized housing

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Marginalized Filipinos looking to live in socialized housing might have to pay more for a home as construction costs might spike due to a government move to further tax imported cement.

The largest socialized and economic housing associations in the country fear the safeguard duty that will be imposed on imported cement will eventually burden even housing beneficiaries, according to a joint statement on Friday.

This development came as the Department of Trade and Industry (DTI) said Thursday night that it would impose a provisional P8.40 safeguard duty on imported cement for more than six months, or until the end of an ongoing investigation into the cement industry.

Cement prices went up before tariff announcement

The move, which may not come as a surprise to some given the recent comments of DTI Secretary Ramon Lopez, is essentially a choice to side with big local manufacturers who he claimed to have gotten hurt by cement imports in the past years.

It is still not clear, however, how bad exactly local manufacturers had been affected by the surge in imported cement in the past years.

Weeks before this, however, the price for a bag of cement had already gone up from P205 to P225, according to Jefferson Bongat, president of the Organization of Socialized and Economic Housing Developers of the Philippines (OSHDP).

Together with Marcelino Mendoza, president of the Socialized Housing Alliance Roundtable Endeavour (SHARE), Bongat opposed the additional tax on cement imports.

“This will result eventually in additional cost to be shouldered by housing beneficiaries. Construction materials used in manufacturing low-cost housing should not be subjected to new taxes,” they both said.

Mendoza said socialized housing is a very low margin undertaking that gets more expensive.

Delays caused by material shortages and ability to purchase on credit affect a lot on the ability of housing developers and housing non-government organizations to remain viable, he said.

The data focused on imports are made by cement importers, not by local manufacturers.

Safeguard measures act as an emergency relief provided to a domestic industry, which was “seriously injured” due to a sudden and sharp increase in imports, DTI said on its website.

While further details of the investigation are still not available, DTI has noted the surge in imported cement since 2013. It is not yet clear how bad big local players, who critics say had accumulated profits through the years, got hurt in the past.

Moreover, the DTI only cited data that showed how much pure importers have imported through the years. The data did not include the imports made even by big local cement manufacturers.

Cement importers, on the other hand, only have a profit margin of P8.25 per bag of cement, according to the data from the Philippine Cement Importers Association (PCIA). Once put in effect, the tariff will even be more than what the importers earn per bag.

‘Imports do not create jobs but even help those in other countries’

In a statement on Friday, Secretary Lopez defended the decision, noting it is not punitive in nature.

“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,” he said.

“Growing capacities [of local manufacturing firms] also create local jobs that help alleviate poverty.  Imports do not create local jobs but help jobs in the source country,” he added.

“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,” he added. /jpv