'Unresponsive' cement firms face DTI sanctions

The decision of the Department of Trade and Industry to encourage cement importation to bring down domestic prices does not take local cement manufacturers off the hook, Trade and Industry Secretary Mar Roxas II said.

According to Roxas, the DTI is still prepared to exercise its prerogative and suspend the incentives and privileges being enjoyed by cement companies for being "unresponsive to requests for information that would justify the recent increases in the price of cement."

"As a matter of normal practice, cement companies ordinarily come to the DTI to explain whenever they feel that an increase in domestic price was necessary," Roxas said. "But there has been a series of increases that they have yet to explain to us."

According to Roxas, cement companies were told to make the necessarily clarification before the National Price Coordinating Council headed by the DTI which monitors the movement of such basic commodities as construction materials.

Roxas said most of the cement companies have complied with repeated requests for production data but he said the uncooperative companies still face the possible suspension of their incentives if they fail to comply.

The Board of Investments (BOI) earlier reported having difficulties making cement companies comply with its directive to disclose production figures to prove that costs were driving cement prices up despite the persistently low demand.

Because of intense competitions, cement manufacturers fear that the information would leak out to other companies. However, the official said they have to show information to prove that the price increases were justified by increasing cost of production.

Under Rule IX, Sections 5 of the Omnibus Investments Code, no availment of incentives may be allowed an enterprise delinquent in compliance with any of the terms and conditions of registration, including such reports and statistical data which may be required by the BOI.

The BOI said the code requires the companies to submit the same documents anyway, including quarterly production and sales report, chart of accounts and statement of the total peso value of incentives availed of during the precious calendar year.

These incentives include income tax holidays, deduction for labor expense, tax credits on domestic capital equipment and unrestricted use of consigned equipment among other incentives and privileges.