FPI head bucks plan to scrap cement import tariff

A prominent leader of Philippine industries yesterday cautioned government officials mulling the elimination of tariffs.

Meneleo Carlos, chairman of the Federation of Philippine Industries (FPI), said the government should “strengthen its protective mechanisms to ensure the viability and sustainable growth of domestic industries, instead of weakening their global competitiveness.”

According to Carlos, some countries have announced plans to subsidize exports. “This would weaken the competitiveness of local products against the subsidized imports,” he stressed.

The FPI official added that many countries use tariffs to shield local industries, from subsidized imports.

“It is therefore, imperative at this time that the tariffs are not carelessly decreased, or worse, eliminated. The cement case is an example where reducing the already low five percent tariff to zero may be ill-advised because of the current global crisis, and the fact that Malaysia and Vietnam, for instance, maintain their 50 percent and 40 percent tariffs, respectively.”

Carlos expressed fears that the move to scrap the three-to-five percent tariff on imported cement might be “ill-advised and an unsound decision that could put the Philippine cement industry at the mercy of unscrupulous importers.”

The Cement Manufacturers Association of the Philippines (CeMAP) vigorously opposed the proposed zero tariff for imported cement, saying it could pave the way for uncontrolled importation, giving rise to possible dumping and rampant smuggling of even cheap and substandard cement.

CeMAP said Philippine cement prices remained reasonable, adding that recent cement price increases were not only among the lowest price adjustments for basic construction materials, but also among the lowest for cement in different countries.