Cement firms urged to renegotiate finance charges
Trade Secretary Peter B. Favila has urged local cement manufacturers to renegotiate their “unusually high” financing charges so that savings can be channeled towards reducing their prices to benefit the consumers.
Favila said since the cement firms are big companies, they should be getting premium interest rates from their creditor-banks.
Also, with the current low interest rate regime, Favila said the cement companies-led by multinationals Holcim, Cemex and Lafarge should haggle for the lowering of their financing charges.
Favila gave this advice after finding out that the financing charges of the cement firms were “on the high side” based on the documents they submitted detailing their operating costs.
The trade chief said he even asked the opinion of Bangko Sentral ng Pilipinas Governor Amando Tetangco, who also shared his view that the industry’s financing charges were indeed too high.
Favila is looking into reports the industry is guilty of overpricing, as alleged by some quarters, including the World Bank, by comparing the players’ operating cost with their ex-plant prices.
Members of the Cement Manufacturers Association of the
But John Reinier H. Dizon, president of Lafarge’s Philippine unit Republic Cement, said they do not share Favila’s opinion that their interest rates are too high.
He, however, conceded that their rates are higher than what is currently prevailing in the market.
“Our average interest rate is 6.3 percent. Is that high?” Dizon noted.
Dizon said they, however, will keep on bargaining for the most competitive rates from their creditors.
“We are quite transparent and these accounts are audited,” he said.
Dizon also pointed out that a primary factor affecting their pricing is the high cost of power in the country, the second highest in
Power costs, he said, make up about 35 percent of their operating expenses.
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