Without tariff, imported cement seen to flood RP

Amid indications that government may revoke the P20.60 provisional tariff on imported cement, imports are expected to once more corner at least 35 percent of the domestic market, further endangering the already-vulnerable local cement industry.

Industry figures show that in March alone, importers brought in 3,312,500 bags of cement into the country, or nearly 50 percent more than the February figure of 2,227,500 bags, and more than 200 percent higher than the January imports of 1,062,500 bags.

The continued influx of imported cement has raised apprehensions among local government units hosting cement plants. In Iligan City, for instance, Mayor-Franklin Quijano appealed to President Arroyo to personally address the problems facing the cement industry, one of the few remaining industries in Mindanao.

"If we lose the cement industry to importers, all our efforts to bring development and peace to Mindanao will be jeopardized," Quijano had said.

For his part, Socio-economic Planning Secretary Dante Canlas had conceded that the decision to retain the provisional tariff on imported cement lies with the President. According to him, the President is empowered to issue an Executive Order calling for tariff adjustments, if such is the recommendation of the Cabinet-level Tariff and Related Matters Committee and the National Economic and Development Authority board.

The Department of Trade and Industry had approved the imposition of the tariff as a safeguard measure for the local cement industry, which has lost to imports more than 21 percent of the domestic market over the last three years. Imports had less than two-percent market share in 1998, but were able to corner a hefty share of the domestic demand for cement through artificial and unfair pricing, according to a November 2001 report of the DTI.

With the Tariff Commission’s recent rejection of the cement industry’s petition for safeguard measures, importers are expected to step up their importations, given that they were able to control as much as 35 percent of the market last July 2001.

The DTI however has rejected the Tariff Commission’s negative recommendation, saying it was based on "a flawed framework, inconsistent inferences and erroneous methodology".