P10 initial safeguard duty on cement imports imposed

The Department of Trade and Industry (DTI) is imposing a final general safeguard measure of P250 per metric ton, or P10 per 40-kilogram bag of imported cement for the first year of the measure’s three-year implementation.

The number is lower than the P12 per 40-kg bag of imported cement prescribed by the Tariff Commission (TC) after concluding its findings on the injury caused by the imports to the local cement industry, but higher than the P8.40 provisional safeguard measure applied by the DTI earlier this year.

For the second year of the implementation, the trade agency will be applying a duty of P9 per 40-kilogram bag of imported cement, and will further lower the duty to P8 on the third and final year. This is pursuant to Section 18 of Republic Act 8800, or the Safeguard Measures Act which reduces the amount of safeguard duty in the succeeding years of implementation.

“Basically, the rationale for the safeguard level is to balance national interest, minimizing the impact to prices for buyers and users while addressing the industry injury issue, and yet still encouraging local manufacturers to continuously pursue efficiencies to be more globally competitive,” DTI secretary Ramon Lopez said in Viber message to reporters on Tuesday, 3 September.

The imposition of the duty will take effect 15 days after publication. The DTI will conduct an annual review to determine the appropriateness of the safeguard duty.

In a statement, the DTI said that upon its review of the TC’s findings and recommendations resulting from its investigation, it has established that the imposition of the measure shall be in public interest.

The provisional safeguard measure by the DTI stems from its claim that the surge in cement imports, which were priced lower than local cement, within a five-year period caused “serious injury” to the domestic industry. This consequently prompted the TC to conduct a formal investigation to verify the agency’s claim and justify the duty.

The TC had the responsibility of declaring the validity or invalidity of the safeguard, while the decision to scrap the safeguard duty or impose higher tariffs on cement imports falls on the DTI.

According to the trade agency, the safeguard measure will level the playing field between local cement manufacturers and cement importers, while also challenging the local cement industry to be globally competitive.

“Further, users of cement retain their option to choose between the local and imported cement since imports will still be allowed. The imposition of a safeguard measure is not expected to cause a shortage of cement in the domestic market considering that the cement manufacturers have sufficient capacity to meet domestic demand,” DTI said.