DTI eyes zero tariff on flour and cement

The Department of Trade and Industry (DTI) is looking at removing import safeguards on flour and cement.

In the meantime, Trade Secretary Peter B. Favila said he will issue letters of contempt to companies that have not provided documents for to justify price hikes in cement and flour. 

Favila said he is batting for the scrapping of the tariff on cement and flour for a period of six months. The temporary zero tariff will be reviewed by the Board of Investments which will then decide if the zero percent tariff will be made permanent.

Meanwhile, the Philippine Association of Flour Millers (PAFMIL) and a cement firm denied they are not providing the government with documents justifying the upward movement in prices.

“We have already given the DTI all documents they asked from us as early as last month. If they need more we will be happy to give it to them but right now there are no additional requests,” PAFMIL executive director Ric M. Pinca said in a telephone interview.

In August, flour millers adjusted their prices from   P946-P957 per 25-kilogram bag to P955-P970 for hard flour and from P847-P858 to P870 for soft flour.

However, prices were rolled back on Sept. 15 to their previous levels at the behest of the DTI when big bakeries asked for lower flour prices, saying they would either increase the price of bread or shrink the local breakfast favorite pan de sal further if they do not get their discount.

Cement maker Holcim Philippines Inc. said it also submitted all the necessary documents last month when it informed the DTI of its planned price adjustment.

However, it said they will not roll back the price of cement.

“That (investigating price increases) is the task of the DTI. We sent them a letter informing them of our price increase and they said they will look into it,” Holcim Philippines Inc. chief financial officer Ed Sahagun said.

The standard retail price of Holcim cement is P204 to P223 per bag. Sahagun noted that the two price increases of Holcim amounted to 10 percent adjustment for the whole year. “Barring any unnatural occurrences, there will be no more price increases this year,” he said.

The price of coal now is more than double when compared to a year ago.

“It’s hard to absorb all the costs because coal affects 40 percent of our variable cost,” Sahagun explained.