Removal of tariff shield prods dumping—CeMAP

Safeguard measures should be imposed on the importation of cement products as incidences of dumping of construction materials have been rising.

The Cement Manufacturers Association of the Philippines (CeMAP) has urged the Marcos Jr. administration to protect the local industry.

Earlier, Trade and Industry Secretary Cristina Aldeguer-Roque announced a motu proprio probe to determine whether the increased cement imports are causing or threatening to cause serious injury to the local cement industry, as evidence obtained by the DTI said the domestic cement industry incurred substantial losses in 2023, amounting to P15 billion.

“There has been no safeguards duty on imported cement for two years already. We believe the removal of the safeguards contributed to the surge of imported cement,” CeMAP Executive Director Renato Baja, told the DAILY TRIBUNE on Monday.

Despite this, Baja said his group cannot yet conclude a massive cement smuggling in the country.

“CeMAP currently has no certainty whether cement smuggling is occurring in the country. The risk, of course, is there, given the Philippines is an archipelago,” he said.

In October 2022, the Tariff Commission recommended not to extend the safeguard measure for cement imports.

“The Commission recommends that the imposition of the definitive general safeguard measure on importations of Ordinary Portland Cement Type 1 and Blended Cement Type 1P no longer be extended,” the TC said in its final report on the formal investigation on the petition for extension of safeguard measures filed by CeMAP.

“The domestic cement industry has undertaken, and continues to undertake, considerable efforts to comply with its adjustment plans and is thus making positive adjustments to import competition,” the TC ruling reads.

The TC came up with the decision, explaining that during the period under review from 2019 to 2021, “the domestic cement industry maintained its market standing, increased its mill capacities, stabilized its manufacturing costs, and improved its profitability.”

Subsequently, former Trade and Industry Secretary Alfredo Pascual did not seek an extension into the safeguard measures on cement imports as he said the DTI did not find “serious injury” to the domestic cement industry from the expiry of the measures, basing his decision on the probe of the TC.

The DTI-Department Administrative Order (DAO) No. 22-14 was signed by Pascual on 24 October, which cited the recommendation of the Tariff Commission (TC) to not extend safeguard measures.

Punitive tariffs can be imposed

Meanwhile, a government official revealed that safeguard and anti-dumping measures for cement importation could be imposed at the same time.

“This is allowed since there is no express prohibition under the Safeguards Measures (SG) Act and Anti-Dumping (AD) Act that the application cannot be simultaneous.

“SG is a safety net for the surge in imports causing injury to the domestic industry. In a way, providing breathing space for domestic industry to import competition,” according to an official who requested anonymity.

“While AD, is unfair trade. It occurs when manufacturers export a product to another country at a price below the normal price with an injury effect. SG measures global in application while AD is country and exporters specific,” the official further said.

The source said Vietnam is the main country where imported cement is sourced, followed by China and Indonesia.

“Vietnam tops imports at 93 percent, PROC and Indonesia, at 1 percent to 5 percent, the rest are negligible. These are imports relative to domestic production. In a way, we can say these displaced domestic products,” according to the official.

In 2023, the DTI imposed anti-dumping duties on cement from Vietnam for five years, citing the imminent threat of material injury to the domestic cement industry.

Roque lauded

On Sunday, CeMAP commended Roque for initiating safeguard measures investigation on cement imports to address the persistent influx of foreign cement that has flooded the Philippine market, despite the overcapacity of local producers.

CeMAP’s Baja said the Philippine cement industry can produce up to 50 million tons annually, significantly exceeding the estimated national demand of around 35 million tons.

However, imported cement, particularly from countries like Vietnam, where domestic demand is declining and surplus production is exported, continues to exert pressure on local manufacturers.

Baja also said that our local cement industry is one of the few sectors in the Philippines where nearly 100 percent of raw materials are sourced locally, the cement industry transforms these resources into high-quality products through Filipino expertise, supporting the nation’s infrastructure needs.