Plea to extend safeguard duties on imported cement rejected

The Tariff Commission (TC) has thumbed down the petition of the local cement manufacturing industry to extend the safeguard duties on imported cement.

In a bulletin dated Oct. 6, the commission said there was “no significant overall impairment” to the local cement industry that would constitute a “serious injury” from the importation of ordinary Portland cement type 1 and blended cement type 1P from various countries.

“There is no existence of an imminent threat of serious injury and significant overall impairment to the position of the domestic cement industry in the near future,” according to the bulletin.

Because of this, the commission recommended not to extend the validity of the safeguard duties, or additional taxes that are levied on these imports to regulate the cement industry.

Original case

According to the commission’s final report, details connected to the case trace back to September 2018 when the Department of Trade and Industry (DTI) conducted a motu proprio preliminary investigation on whether the imports of these two cement types were hurting the local industry.

Almost a year later in January 2019, the DTI found that increased cement exports were hurting the local industry, leading to a subsequent separate investigation by the TC.

This led to the imposition of a general safeguard measure in August 2019, which will last until 2022, that levied a tax of P250 per metric ton or P10 per 40-kilogram bag on these two types of imported cement in the first year.

In the second year, it was originally at P225 per MT or P9 per 40-kilogram bag, but was later modified to P245 per MT or P9.80 per 40-kilogram bag.

On its third year in 2022, the duty stands at P200 or P8 per 40-kilogram bag

The extension, which was petitioned to the DTI in February of this year, was sought by the Cement Manufacturers Association of the Philippines as represented by four its member-firms: CEMEX Holdings Philippines; APO Cement Corp. and Solid Cement Corp.; Holcim Cement Philippines; and Republic Cement and Building Materials, Inc.

Support from cement importer

Sought for comment, Phinma Construction Materials Group CEO Ed Sahagun told the Inquirer that they welcome the recommendation from the commission not to extend the duration of the safeguard measure.

“This went through a long process and a lot of consultations with all the cement companies,” Sahagun said in a phone interview, saying that the recommendation was “well-founded” and was not rushed.

“In my perspective, it is the consumers who won in this because there is competition, which they will benefit from,” he added when asked if this can be considered a victory for local firms that import cement.

Pressed on how much the additional taxes levied on these imports have affected firms like them, the Phinma executive simply described the number as “substantial” and “big,” but declined to disclose specific figures citing confidentiality.