Roxas urges DTI to remove safeguard duty on cement

Sen. Mar Roxas has urged the Department of Trade and Industry to consider the removal of the safeguard duty on cement as prices of the construction material have continued to move up.

Roxas, who served as trade secretary prior to running for the Senate, said the continued rise in the price of local cement is a sign that the domestic manufacturers are now ready to face up to foreign competition.

He pointed out that three years ago the local cement industry complaint about the pressure it was facing from cheap imports which was forcing them to lose revenues by lowering its prices.

It was during his stint as trade secretary that the safeguard duty or additional tariff was imposed on cement imports in order to protect the domestic industry from the competition.

The provisional tariff was imposed on Dec. 10, 2001 and was equivalent to P20.60 per bag.

On June 25, 2003, the DTI imposed the ta-riff for three years starting from the provisional period until Dec. 10, 2004.

Roxas pointed out that the DTI decided to reduce the safeguard duty last Feb. 16, 2004 after sensing that local cement producers had regained some pricing power and improved margins.

"Since then, cement prices have steadily increased from a low of P98 per 40-kilogram bag to as high as P170 this month in some areas. Evidently, local cement manufacturers are ready to face reasonable foreign competition," Roxas said.

The DTI recently reported that cement prices have risen to significantly high levels in some parts of the country, particularly in Siquijor where the price of a bag of cement has reached P170.

Assistant Trade Secretary J. Norman Hocson explained that the increase was due to the high shipping cost.

According to the DTI, the prevailing average retail prices of gray Portland cement nationwide for the period March 1 to 11, 2005 showed a slight increase of 0.29 percent from P158.05 to P158.51 per 40-kg bag compared to the fourth week of February 2005.

In all other regions of the country, the retail price of cement remained constant, ranging from P153 to P165 per 40-kg bag except for Region III (Cabanatuan) where the average retail price increased from P150 to P154 per 40-kg bag.

The local cement manufacturers as represented by the Cement Manufacturers’ Association of the Philippines has sought for an extension of the safeguard duty on gray Portland cement and the Tariff Commission has been conducting public hearings to listen to the merits of the petition.

The Tariff Commission is expected to submit its report to Trade Secretary Juan Santos before the end of this month.

"It could be the time has come for the safeguard measure to be eliminated," said Roxas, who serves as chairman of the Senate committee on trade and commerce.