TC scraps duties on imported cement

By Ma. Elisa P. Osorio
Published on The Philippine Star

THE Tariff Commission will recommend to Malacañang the elimination of duties on the importation of cement, a move that is expected to bring down cement prices in the local market.

A three-percent tariff is currently levied on every 40 kilos of cement coming from the Association of Southeast Asian Nations (ASEAN) and five percent from non-ASEAN members.

World Bank country director Joachim Von Amsberg earlier said the price of cement in the Philippines is “too high” and suggested opening up the industry which is dominated by three major players.

“We need to inject more competition in the market,” said a ranking TC official who spoke on condition of anonymity.

The official added TC chairman Edgardo Abon and his two commissioners have recognized the need to remove the duties imposed on cement in order to make the product cheaper.

The recommendation will be forwarded to the Cabinet-level Committee on Tariff and Related Matters (CTRM), which will decide if it would be carried for the issuance of an executive order (EO).

But cement manufacturers strongly opposed the move, saying the removal of tariff on cement will pave the way for dumping, which will cause the industry to lose billions.

“The zero percent tariff is very damaging to the industry,” Cement Manufacturers of the Philippines (CeMAP) president Ernesto Ordonez said.

A multisectoral coalition advocating trade and economic reforms has also supported CeMAP’s position to keep the tariff on cement.

The Fair Trade Alliance, through their lead convenor Wigberto Tanada said manufacturers in China , Taiwan, Japan and other competing countries would be shipping their cement to the Philippines especially when they run out of silos and warehouses to store their quick-hardening cement.

“These excess capacities are targeted for the Philippines because of our fast growing market for infrastructure building,” Tañada said. “There is no more room for this quick hardening surplus cement in their silos and warehouses. The factories in China, Japan and other countries would ship them out at artificially low prices. They have little to lose.”

The cement industry is dominated by three major players — Cemex, Holcim and LaFarge- but CeMAP said there is hardly any cartel in the industry since there is even a price war among the competitors.

Ordonez questioned the motive behind the tariff elimination, pointing out that there is only a need to remove the safeguards if there is a cartel. “The industry is as liberalized as they can come,” he explained.

Ordonez said the tariff is a way to level the playing field. In fact, he said the tariff in the Philippines is much lower compared to Malaysia, which has 50 percent, and Vietnam, with 20 percent.

“This (tariff removal) sends the wrong signal,” he lamented.

Ordonez said the move is unfair for the foreigners who came in to invest in the country. “They put in capital. They gave us labor opportunities. We should appreciate them,” he stressed.

He said after the 1997 Asian financial crisis, the local cement companies were faced with a shrinking market and financial problems. International players then came in as “white knights” to save local companies from their financial woes.

According to the TC report, the crisis ensured that the local companies were bought for a bargain, if not basement, prices. Between 1997 and 1999, Blue Circle, Cemex, Holcim and Lafarge took over twelve companies which gave them 89 percent of total industry capacity.

    Leave a Reply

    Fill in your details below or click an icon to log in: Logo

    You are commenting using your account. Log Out / Change )

    Twitter picture

    You are commenting using your Twitter account. Log Out / Change )

    Facebook photo

    You are commenting using your Facebook account. Log Out / Change )

    Google+ photo

    You are commenting using your Google+ account. Log Out / Change )

    Connecting to %s

  • FairTrade in pictures

  • Recent Posts

  • Archives

  • Founded in 2001, the Fair Trade Alliance (FairTrade) of the Philippines is a broad multisectoral coalition of formal and informal labor, industry, agriculture, NGOs and youth pushing for trade and economic reforms.
  • FairTrade seeks to promote a job-full and progressive Philippine economy through: (1) the promotion of fair trade rules and active agro-industrial policies based on the existing development needs of the nation, (2) the development of a positive agro-industrial culture to foster innovation, hard work and solidarity between and among the productive sectors of Philippine society, and (3) the transformation of an economy debased and stunted by colonial mentality, unequal trade and neo-liberal dogma into a modern, sustainable and broad-based.
  • Fair Trade Alliance (FairTrade)
    3/f Philippine Rural Reconstruction Movement (PRRM) Headquarters
    #56 Mo. Ignacia cor. Dr. Lascano, Quezon City, The Philippines
    (+632) 372 49 91 to 92 local 30
    (+632) 372 39 24

    FairTradeWeb is powered by Wordpress, MediaMax, MediaFire, Yahoo!, FeedBurner and Flickr.

  • Subscribe in Bloglines

%d bloggers like this: