THE cement industry said it requires more time to adjust to competition from imports with the looming expiry of safeguard measures protecting domestic manufacturers on Oct. 22, which the Tariff Commission (TC) did not extend.
Cirilo M. Pestaño, Cement Manufacturers Association of the Philippines, Inc. (CeMAP) executive director, said in a statement on Monday that the safeguard measures help the industry prepare for global competition.
“CeMAP is saddened by the recommendation of the honorable TC to discontinue the implementation of the safeguard measure upon its expiry in Oct. 22, 2022. The requested safeguard measure extension was necessary for adjustment plans to be completed in order for the industry to be ready for global competition,” Mr. Pestaño said.
Mr. Pestaño said the expiry of safeguards against cement imports “jeopardizes” the measures taken by the industry in response to the challenges brought on by the coronavirus disease 2019 (COVID-19) pandemic.
“Terminating the safeguard measures prematurely jeopardizes these efforts (to adjust) and undermines the painstaking work of the cement industry to stay operational during the very difficult months of the still ongoing pandemic, wherein it continued implementing adjustment plan projects, employing workers, and allying with government and economic stakeholders to jumpstart national recovery,” he added.
Following an application to extend safeguard measures, the TC issued its final report dated Oct. 5 concluding that there was no “imminent threat (of) serious injury” and “significant overall impairment” on the domestic cement industry from imports of ordinary Portland Cement Type 1 and Blended Cement Type 1P.
“The commission recommends that the imposition of the definitive general safeguard measure on imports of Ordinary Portland Cement Type 1 and Blended Cement Type 1P no longer be extended,” the TC said.
Safeguard measures are authorized by Republic Act 8800. They are triggered when domestic industry claims it is being unduly harmed by imports.
According to the TC, the request to extend the safeguard measures was rejected because the domestic cement industry “has undertaken and continues to undertake” efforts to adjust versus import competition.
The petition for extension was filed by CeMAP early this year, which was represented by four member firms: CEMEX Holdings Philippines – APO Cement Corp. and Solid Cement Corp.; Holcim
Cement Philippines; and Republic Cement & Building Materials, Inc.
“During the period under review (2019-2021), the domestic industry maintained its market standing, increased its mill capacities, stabilized its manufacturing costs, and improved its profitability. There is no evidence of the existence of an imminent threat of serious injury and significant overall impairment to the position of the domestic cement industry in the near future” the TC said.
“The non-extension of the safeguard measure on cement would prevent price increases in both local and imported cement which, in turn, would lead to positive spillover effects on the growth of the construction industry, which has a high contribution to gross capital formation,” it added.
Mr. Pestaño said the threat remains from cement imports.
“The threat of injury to the cement manufacturing industry remains imminent from neighboring exporting countries, who continue to this day to flood the domestic market with imported cement products even with the safeguard measure enforced,” Mr. Pestaño said.
Asked to comment, importer Philcement Corp. President and Chief Executive Officer Eduardo A. Sahagun said that the TC’s decision helps improve the competitiveness of manufacturers.
“I think what is important is that our industries are competitive, not only in the Philippines, but also at least regionally,” Mr. Sahagun said in a mobile phone interview.
“It is also important that the construction projects of the government will not be delayed because we need those to pump prime our economy. It is vital that the proper cement that they need will be available at the time they need it,” he added.
In 2019, the Department of Trade and Industry (DTI) released Department Administration Order (DAO) 19-13 which imposed safeguard measures on the two types of cement for three years after it found that higher cement imports pose a threat of serious injury to the cement industry.
Under the DAO, the safeguard duties ranged from P250 per ton in the first year of implementation, down to P200 per ton this year
The TC in its final report said Type 1 and Type 1P cement imports rose 11.2% to 5.896 million metric tons (MT) in 2020, and16.2% to 6.850 million MT in 2021.
Type 1 and Type 1P cement imports in the first six months also hit 3.5 million MT, up 7% against the three-year average of 3.27 million MT between 2019 and 2021. — Revin Mikhael D. Ochave