According to Chino Marquinez of CUP and Jesus Arranza of CHARGE, the Tariff Commission has arrived at the same conclusion that the so-called losses of local cement firms were due in part to huge interest expense.
CUP and CHARGE disclosed "the interest paid to parent companies and/or stockholders of the cement companies are actually profit repatriations disguised as interest," adding that "they are not real losses."
Citing the findings of the Tariff Commission, they noted that local cement firms actually earned P1.9 billion during the period of import surge.
The study also disclosed that the negative bottomline of the local cement firms was due to huge interest expenses, foreign exchange losses and a change in accounting policy.
CUP and CHARGE said the Tariff Commission noted that in 1997, the interest expense of local cement companies amounted to only P993 million. By 2000, the amount ballooned to P5.1 billion from P3.9 billion in 1999 and from P2.8 billion in 1998.
Local cement companies lamented that because of the entry of cheap imported cement, they became cost-ineffective due to declining market share.