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Cement makers call for higher safeguard duty

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CEMENT manufacturers are seeking a higher safeguard duty on imports, citing “serious injury” from a surge in foreign cement available in the market.

Citing government data in his presentation at the Tariff Commission’s Monday public hearing on the case, Cement Manufacturers Association of the Philippines Executive Director Cirillo M. Castaño said cement imports surged 64% to 1.74 million tons in the January to February period from the 1.06 million tons in the same period last year despite the imposition of the safeguard duty mid-February.

“Imports grow despite the safeguards. Our appeal, therefore, is for a higher definitive tariff rate to cure the serious injury,” Mr. Castaño said.

CeMAP Chairman Renato C. Sunico said the group has not determined a specific rate for safeguard duty

Mr. Castaño added that depending on imports will compromise the country’s economic gains as traders have lower levels of tax remittance, investment and job generation compared to manufacturers.

“There is reason to believe that this will lead to serious repercussions that will be detrimental to the Philippine economy,” Mr. Castaño added.

CeMAP is composed of CEMEX Holdings Philippines Inc., Holcim Philippines Inc., Republic Cement Services, Inc., and Taiheiyo Cement Philippines, Inc.

In its road map completed last year, CeMAP expects, cement demand in the Philippines can reach up to 52 million tons or 450 kilos per capita indicating an annual demand growth of about 7% between 2016 to 2025.

The current domestic capacity of all 20 producers is at 34.5 million tons.

CeMAP said during the hearing it cannot provide production figures for the organization as members do not share such data.

Trade Secretary Ramon M. Lopez has said that domestic capacity is at 35 million tons per year while current demand is at 25 million tons annually.

The road map, done in consultation with the Department of Trade and Industry, noted that imports are necessary to address demand in the short term.

CeMAP said there are cement manufacturers currently undergoing expansion to meet expected demand.

Republic Cement Services, Inc.’s Vice-President for Strategy and Business Development Reinier Dizon said the firm has an ongoing P10-billion investment to upgrade its plants and boost capacity but added the upgrades may take some time and would need support from the government.

The Trade department had imposed a provisional duty of P210 per metric ton of P8.40 per bag due to a surge of imports from 2013 to 2017, in a way that allegedly harmed manufacturers.

The order took effect mid-February and will be implemented for 200 days to allow the Tariff Commission to complete its investigation on whether further protection is needed.

The Tariff Commission gave five days through May 24 to hear stakeholders to determine whether there is a need for the duties. If it rules in favor, the agency can also raise or lower the definitive duty. — Janina C. Lim

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