House body may junk cement firms’ bid for tar

The House of Representatives said yesterday that there are grounds for the government to reject the cement industry’s petition for punitive duties on cement imports. They said the continuing increases in domestic prices will make it difficult for local manufacturers to prove their case.

Albay Rep. Jose Maria Sarte Salceda said there is an emerging consensus among members of the House committee on trade and industry to oppose the cement industry’s pending petition at the Department of Trade and Industry (DTI).

Salceda issued the statement as the House committee started investigating allegations that the cement industry has been manipulating local cement prices while seeking relief from the government in its lobby against cheap imported cement.

Salceda, who is senior vice chairman of the committee, said cement manufacturers have not been able to prove losses due to the surge in imports.

Salceda said the committee’s initial review of industry figures indicates that the "alleged losses" were due to financing charges incurred by these companies during their "over-expansion" in the early 1990s.

"They could not even prove that they have been injured by imports because prices are going up, gross margins are going up and revenues are growing," Salceda said, adding that even considering a lag, 2000 figures indicated no losses directly caused by imports.

"They can not explain why prices are rising," Salceda said. "How can this happen when there is over-capacity not only in the local market but also in the overseas market and there is weak demand in the Philippines."

Salceda also criticized the industry for its role in the recent dumping war between the Philippines and Taiwan where Philippine cement companies dumped cement into Taiwan and brought prices down to bring Taiwan Cement Corp. to its knees.

TCC was the leading exporter of cement to the Philippines until other Taiwan-based cement companies forced it to shut down its operations in the Philippines in the wake of collapsing cement prices in Taiwan which analysts attributed to strategic shipments of cement from the Philippines.

"They should not come into the House hearings with blood in their hands," Salceda said. "How can they seek redress from the government if they themselves are guilty of dumping elsewhere."

During the committee hearings, Salceda said it was established that local cement companies shipped $20-million worth of cement to Taiwan at $20 per bag. The DTI has yet to decide on the cement industry’s petition for punitive duties on imported cement, filed under the provisions of the newly-enacted Safeguard Measures Act.

Under the new law, local industries could seek relief from competing imported products if they could show that there had been an import surge that caused injury to the industry.

The government is allowed to impose various measures ranging from higher import duties to outright volume restrictions depending on the severity of the injury and the degree of import surge.