Roxas threatens to remove safeguard tariff on cement

Trade and Industry Secretary Manuel Roxas II has threatened to remove the safeguard tariff on cement following what he observed to be an "anomalous" P5 increase in the price of Portland cement.

A Department of Trade and Industry (DTI) monitoring report on local cement prices shows that in a short period of two months, there has been a P5-increase in the price of Portland cement.

The increase is deemed anomalous by the DTI, Roxas said, because it happened during the rainy season when demand for cement is presumably low.

The DTI, however, is not discounting the possibility that there was an increase in demand due to some big construction project. This will have to be ascertained, Roxas said.

The DTI will also assess the impact of the fuel price increase as well as the power price adjustment on cement prices.

Roxas stressed that the imposition of safeguard measures on imported cement does not mean that manufacturers can now "gouge consumers."

Safeguard measures, Roxas pointed out, "are not supposed to be used to take advantage of consumers."

Roxas said the DTI is mandated and empowered by law to review the safeguard tariff as it deems necessary, particularly with respect to whether the safeguard tariff fosters healthy competition, promotes the general welfare of consumers and enhances industrial development.

The DTI, in July this year, made permanent the P20.60 safeguard tariff on imported Portland cement following findings that imported cement was being dumped into the country and was adversely affecting supply and cement prices.

Government had gotten assurance from local cement manufacturers that with the safeguard tariff cement prices and supply would continue to remain stable to benefit consumers.

Cement importers had warned that without imported cement, local cement manufacturers would again form a cartel to control supply and drive up prices.

Since the imposition of the provisional safeguard tariff in November 2001, cement prices have remained relatively stable.

Based on a DTI monitoring of cement prices, from a nationwide average of P109 per 40 kilogram bag of cement in January, cement prices have gone up to an average of P120 per bag as of October this year.