By Janina C. Lim, February 5 2019; Business World

Image Credit to Eagle Cement

THE Tariff Commission will ask the Department of Trade and Industry (DTI) to explain the imposition of tariffs on imported cement and explain to those opposing the measure the need to implement duties.

The move was an apparent reaction to the request of Laban Konsyumer, Inc. (LKI) and cement manufacturers, who questioned the DTI for not participating in the hearing.

LKI President Victorio A. Dimaguiba said DTI’s representative, particularly Luis M. Catibayan who heads the Bureau of imports Services which conducted the motu proprio review of cement tariff, should explain its decision to implement tariffs.

While the Commission has no power to cite parties in contempt for non-attendance, Tariff Commissioner Ernesto L. Albano said that the presence of DTI representatives could give weight to its backing for tariffs, as contained in documents it submitted to the Commission.

“At most, the appreciation of evidence will be less compared to if they are here,” he said. “At best for consumers, we will take the evidence they gave us at face value.”

In a mobile message, Trade Secretary Ramon M. Lopez said “I wasn’t aware of the sched(ule),” but expressed willingness to send representatives to the next hearings in May.

Tariff Commission Chair Marilou P. Mendoza said the commission’s investigation will involve data verification in order to assess the benefits and damage in imposing such duties, which are meant to protect domestic industry.

“We’re required to look at the effects of the recommendation,” Ms. Mendoza told reporters on Monday.

The Tariff Commission has 120 days to complete its investigation to affirm or reject the DTI’s provisional measure.

After determining that the influx of imported cement was injuring the domestic cement industry, the DTI decided to impose a tariff of P210 per metric ton (MT) on imported cement.

The measure is to be implemented for 200 days starting Feb. 9. During this period, cement manufacturers are required to maintain their current retail price levels.

Under Republic Act 8800 or the Safeguard Measures Act of 2000, a provisional duty can be imposed under “critical circumstances where a delay would cause damage which would be difficult to repair, and pursuant to a preliminary determination that increased imports are a substantial cause of, or threaten to substantially cause, serious injury to the domestic industry.”

The duty, equivalent to P8.40 per 40-kilo bag, is expected to put pressure on cement importers who claim an P8.25 profit margin per bag.

The Philippine Cement Importers Association warned of a shortage due to the measure, saying that even domestic manufacturers have themselves been importing to fill shortages with their shipments accounting for 36% of total cement imports in 2018.

Any disruption to cement supply may slow down the government’s infrastructure program, the PCIA has said.

However, Mr. Lopez said supply will be sufficient, noting that domestic capacity is at 35 million MT a year and current demand at 25 million MT.

Mr. Lopez, nevertheless, recognized the need to increase capacity, given the growth in demand which is expected to double by 2025.

He encouraged the industry to build additional facilities to ensure stable supply in the long run. — Janina C. Lim