Enactment of the Tatak Pinoy Law has provided local businesses the timely support to ensure a level playing field as they battle against the growing menace of predatory pricing prevalent in the cement industry.

The influx of cheap imports from Vietnam had dislocated the domestic industry which lately had invested heavily to match the rising demand as a result of the massive infrastructure buildup and the increase in housing projects.

The law seeks to empower Philippine industries by providing financing and incentives to local producers and manufacturers of quality goods.

Most of all, the law is relevant as it promotes locally produced goods and services.

CeMAP president Cerilo Pestaño maintained that locally manufactured cement is ample, saying the industry has a total expected capacity of 53 million tons this year against a demand expected to soften by 34.5 metric tons (MT).

Such a mismatch between demand and supply will mean that local cement factories operate at below capacity, pushing operating costs higher.

With government accounting for an estimated 40 percent of total cement demand, there is enough locally manufactured cement to keep the projects going, thus, surprising is the trend that importation had picked up.

Local manufacturers have continued investing in additional capacity totaling 13 million tons per annum or MTPA over the last five years, with the San Miguel Group increasing 6 MTPA, Taiheiyo with 3 MTPA higher, Republic Cement at 1.7 MTPA higher, Cemex raising output by 1.5 MTPA, and other players with 3 MTPA higher.

In 2023, imported cement from Vietnam reached 7 million metric tons, almost the same volume in 2022.

Based on Bureau of Customs data, anti-dumping duties imposed starting March 2023 were only levied on 20 percent of total cement imports.

The Tatak Pinoy Act was listed as the priority measure of the Marcos administration which was only appropriate as local enterprises get the support they need from national and local governments to improve operations and attract investments.

Under the law, products will carry a mandated “Made in the Philippines” label to indicate quality and elevate their inherent worth in foreign markets.

A key portion of the Act provides for the prioritization and preference of Philippine products in all government procurement for 10 years which means that projects will only use, among others, cement with the mark.

The law is also expected to spur demand for local goods and services that in turn promotes investments, create jobs, encourage innovation, and, most of all, push tax generation.

The law will generate and sustain high-quality jobs and thus encourage many Filipinos to work in the country rather than look for employment overseas. It may also encourage overseas Filipino workers (OFW) to return to the country permanently.

Despite an adequate supply, the industry continues to be plagued by the continuing influx of imports, mostly from Vietnam, defeating the intent of the imposition of dumping duties on certain manufacturers and exporters. Importers brought in close to 7 million tons (MT) in 2023, which was even higher than in 2022 when the capacity expansions were still under way.

The trend is not expected to change and the figure is expected to rise even further as demand in Vietnam is declining, with manufacturers now demanding a reduction in export taxes on cement.

Manufacturers fear that the lobby in government to reduce the trade tax will encourage more products to be dumped in the Philippines in the coming months.

Cement is a critical product for growth as the sector contributes significantly to the economy, accounting for at least one percent of gross domestic product (GDP).

The domestic industry has invested several billions in the country’s manufacturing sector, generates an estimated 130,000 direct and indirect jobs, and has a multiplier effect on the economy aside from generating more government tax revenues than cement importation.

Cheap imports have cannibalized the market, and in certain cases led to the layoff of workers due to the worsening market situation.

The Tatak Pinoy law provides the foundation for local industries to grow less the unfair competition from dumped products.