DTI defends safeguard duty on cement imports

MANILA, Philippines — The Department of Trade and Industry (DTI) defended its move to impose provisional safeguard duty on cement imports, saying it would not lead to shortage but instead encourage local manufacturers to invest in increased production.

In a statement yesterday, Trade Secretary Ramon Lopez said the new safeguard duty on cement is not punitive and would not cause a shortage.

This, as he said imports would still be allowe and would not require any import permit even with a safeguard duty.

As such, imports would continue to play its role in providing alternative sources of cement supply. 

Instead of creating a shortage, Lopez said the provisional safeguard duty would encourage local manufacturers to expand capacity and lessen the country’s dependence on imports.

Last Thursday, Lopez said the DTI would be imposing a provisional safeguard duty of P8.40 per 40-kilogram bag of imported cement as a relief to local manufacturers.

He said the DTI decided to impose the safeguard duty as cement imports have surged and caused injury to local cement manufacturers.

Cement imports in particular, rose to more than three million metric tons (MT) in 2017 from only 3,558 MT in 2013.

During the same period, the share of imports in the market grew to 15 percent from just 0.02 percent.

Republic Act 8800 or the Safeguard Measures Act allows the country to impose safeguard measures or higher duties on imported goods to provide relief to local players.

The safeguard measures can be applied when it is found there is an increase in imports of a certain commodity and such has hurt the local industry.

The provisional safeguard duty on cement will be in place for 200 days in the form of a cash bond on imported cement while the Tariff Commission is undertaking its formal investigation.

It will take effect 15 days after it is published in newspapers.

Local cement manufacturers will be required to keep prices at current levels while the provisional safeguard duty is in effect.

To ensure compliance with the requirement, the DTI will consistently monitor cement prices.

“The DTI consulted several stakeholders to get all of their insights. In our decision, we aimed to strike a balance between developing local industries and protecting the consumers,” Lopez said.