By Janina C. Lim, January 7 2019; Business World
Image Credit to Eagle Cement
THE Department of Trade and Industry (DTI) said it will complete this week a preliminary investigation to determine whether the domestic cement industry needs safeguard measures to protect it from an alleged influx of cement imports in the past few years.
Trade Secretary Ramon M. Lopez said in a mobile message on Monday that the probe will come to a conclusion soon.
In September 2018, the agency initiated motu proprio a preliminary safeguard measures investigation to assess whether the rise of cement imports from various countries has seriously injured domestic industry.
Citing Bureau of Customs data, the DTI said cement imports rose 70% in 2014; 4,391% in 2015; 549% in 2016; and 72% in 2017.
This increase was one reason for the decline in sales and earnings of cement manufacturers in 2017 when the domestic industry’s revenues fell 11.64% to P116 million, the first drop after three consecutive years of sales increases.
The weighted average landed cost of imports from major producers like Indonesia, China, and Thailand were lower than the average domestic selling price, undercutting domestic producers by 14.28%, 15.36% and 7.87%, respectively.
Cement manufacturers were forced to reduce prices by almost 10% to compete with lower-priced imported cement.
Republic Act 8800 or the Safeguard Measures Act of allows the DTI secretary to launch a preliminary safeguard investigation “if there is evidence that increased imports of the product under consideration are a substantial cause of, or are threatening to substantially cause, serious injury to domestic industry.”
Cement importers protested the imposition of safeguard action against cement shipments, warning of a slowdown in infrastructure and building projects should such a remedy be put in place.
The Philippine Cement Importers Association, Inc. (PCIA) also warned that consumers will bear any additional cost from such a trade measure.
Domestic plants currently produce 26 to 28 million metric tons (MT), short of the 31 to 32 million MT domestic demand, according to the PCIA. — Janina C. Lim