PCC: Plan to tax imports might derail probe on cement ‘cartel’

A move to further tax imported cement in defense of large local cement makers poses a concern for the country’s antitrust body, which is in the middle of probing an alleged cartel in the industry.

Arsenio Balisacan, chair of the Philippine Competition Commission (PCC), told reporters on Thursday the safeguard duty on imported cement might affect its ongoing investigation.

The PCC launched an investigation in 2017 after a former DTI official accused some large local cement makers of anticompetitive behavior, such as keeping retail prices high then claiming some imported brands were substandard.

“I can’t comment on that yet. But obviously, it’s a concern because then you have an ongoing investigation and [you have a policy] that can influence the outcome of the investigation,” Balisacan said, referring to the safeguard measure. Any measure, at this point, could affect the competition between importers and cement producers.

The Department of Trade and Industry (DTI) announced this week it had decided to impose a safeguard duty on imported cement that would  last for three years.  The move will likely turn the tide in favor of local cement producers who would benefit from the added costs imposed on their competitors, the importers.

Safeguard measures are imposed when a domestic industry has suffered due to a sudden and sharp increase in imports, or if there is a threat of such harm.

In this particular case, the Tariff Commission (TC) had probed if the surge in imported cement since 2013 hurt or threatened the local industry.

DTI Secretary Ramon Lopez said the TC’s findings pointed to an “injury to the industry.”

The case of the cement industry shows how different government agencies could have overlapping policy decisions that, in the end, could be counterproductive to the effort of creating a fairer market.

The PCC is currently crafting a national competition policy, a key measure that according to Balisacan will give the PCC and the DTI a “better mechanism” in resolving overlapping decisions and harmonize current rules.

The policy will be issued via an executive fiat.

Balisacan said agencies could coordinate “such that you don’t cancel each other’s efforts.”

“In other words, a competition policy, when it’s practiced properly, does not have to run against agencies and regulators.”