Precarious situation

The Tariff Commission (TC) has commenced an investigation into the possibility of expanding the anti-dumping duties on cement imports from Vietnam to include additional types of cement and manufacturers.

The probe actually began last Nov. 27 and was initiated by the TC following requests from domestic cement manufacturers to extend the measure. Anti-dumping duties are currently applied on imports of ordinary Portland cement type 1 and blended cement type 1A from Vietnam.

Local cement manufacturers have requested an interim review of the scope of these duties and have asked to include blended cement type 1T.

Meanwhile, NCL Trading Joint Stock Co., a foreign exporter, has requested a review of the anti-dumping duty imposed on ordinary Portland cement type 1 from Vietnam.

Anti-dumping duties on ordinary Portland cement type 1 and blended cement type 1P imports from Vietnam were first imposed by the Department of Trade and Industry (DTI) in December 2022 and later updated in February 2023. The measures are set to remain in effect for five years. Starting March 2023, the Bureau of Customs imposed definite anti-dumping duties on Vietnamese cement imports, ranging from 2.33 percent to 23.33 percent depending on the exporting company, according to a report from cemnet.com.

In 2022, the TC ordered the imposition of anti-dumping duties on cement imports from Vietnam as it noted that the locally manufactured cement products are similar to the ones being imported from Vietnam and that the volume of imports of both types of cement at dumped prices is not negligible, accounting for 53 percent of total Philippine cement imports from July 2019 to December 2022.

According to the TC’s final report, the country’s type 1 and type 1P cement imports rose by 11.2 percent in 2020 and 16.2 percent in 2022. It said that the existence of threat of material injury to the domestic cement industry is imminent in the near future, as indicated by the significant rate of increase of dumped imports into the Philippines capturing substantial market share, presence of price undercutting, price depression and price suppression.

It also cited the significant available production capacity of Vietnam, which can accommodate more exports to the Philippines, as well as the latter’s open market. The DTI order, meanwhile, identified 11 cement companies from Vietnam to be slapped with definitive anti-dumping duties.

It said that the outcome of the current review would determine whether the anti-dumping duties will be expanded to additional cement types and manufacturers as sought by the domestic industry.

The TC said that the ad interim review had stemmed from the recommendation of the secretary of the Department of Trade and Industry as well as from local cement makers.

Another cemnet.com report also said that robust demand in the Philippines would be the main bolster for Vietnamese cement exports. The Philippines, followed by the United States, Singapore, South Africa and Malaysia were the top five export destinations for Vietnamese cement in 2024, it added.

Vietnam now accounts for 93 percent of total Philippine cement imports. From a 79-percent market share in 2019, this increased to 91 percent in 2020, 93 percent in 2021, 95 percent in 2022, 98 percent in 2023 and 93 percent during the first half of 2024.

In addition to the TC’s investigation, the DTI has also launched late last year a motu propio preliminary safeguards investigation to determine whether cement is being imported into the Philippines in increased quantities and is causing serious injury to the local cement industry, with the end in view of possibly slapping provisional safeguard duties on imported cement.

Safeguard and dumping duties are trade remedies that protect domestic industries from unfair trade practices.

In 2019, the DTI imposed a general safeguard measure on cement imports for a period of three years that levied a tax of P250 per metric ton or P10 per 40-kg bag on the two major types of imported cement, P225 in the second year, and P200 on the third year after a TC probe found a causal link between increased cement imports and threat of serious injury and impairment to the local cement industry.

The period, however, was not extended after the TC said that there was no significant overall impairment to the local cement industry that would constitute a serious injury from the importation of the two types of cement from various countries.

The government may have underestimated the situation back then. At present, with the local cement industry reeling from massive losses due not only to dumped prices of cement coming from Vietnam but the continuing increase in cement imports since 2019, government must act fast and protect the local cement industry from unfair trade practices by Vietnamese cement exporters before it’s too late.

To the aid of microentrepreneurs

In 2023, the Philippine Statistics Authority recorded a total of 1.246 million business enterprises operating in the country, of which 99.63 percent or 1.241 million are micro and small medium enterprises and only 0.37 percent are large enterprises. And of the total number of MSMEs, micro enterprises constituted 90.43 percent or 1.127 million, followed by small enterprises at 8.82 percent and medium enterprises at 0.38 percent.

These MSMES generated 66.97 percent of the country’s total employment or 6.35 million again with micro enterprises producing the biggest share at 33.95 percent.

Though considered the backbone of the economy, unfortunately, MSMEs and microenterprises in particular struggle to access financing options since financial institutions perceive them as risky borrowers due to their small size, lack of collateral, and limited financial track record, according to a report from the Philippine Institute for Development Studies.

Bicol Saro Partylist Rep. Brian Raymund Yamsuan has urged the Senate to act swiftly on a House-approved measure that aims to encourage the growth of microentrepreneurs by providing them easy-to-access capital through low-interest, no-collateral loans.
The measure, which aims to institutionalize the government’s Pondo Para sa Pagbabago at Pag-Asenso (P3) Program, would also free micro entrepreneurs, like market vendors and sari-sari store owners, from the clutches of predatory “five-six” moneylenders, according to Yamsuan.

Yamsuan said institutionalizing the P3, which would ensure that this micro financing program would remain sustainable over the long term, is aligned with his H.O.P.E. platform for Parañaque City’s 2nd district.

Yamsuan is among the principal authors of House Bill 7363 or the proposed P3 Act, which was already approved by the House of Representatives on third and final reading last year. Several counterpart versions of the P3 Act in the Senate have yet to reach plenary approval.

HB 7363 aims to create the Pondo sa Pagbabago at Pag-Asenso Fund to ensure the program’s sustainability. The effective interest rate imposed on P3 loans as proposed under the bill shall not exceed one percent percent per month for direct lending, and 2.5 percent per month if borrowed from accredited partner financial institutions.

Yamsuan said the bill would benefit more than 90 percent of businesses classified as MSMEs.

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