Tariff on imported cement to stabilize prices

The decision of the Department of Trade and Industry (DTI) to impose a 200-day safeguard tariff on cement imports will not lead to price increases but will in fact reduce and stabilize cement prices as well as assure jobs for thousands of Filipino workers employed by the local cement industry.

This was stressed yesterday by former Congressman Edcel Lagman, executive vice president of the Philippine Cement Manufacturers’ Corporation (Philcemcor) and founding member of the Free Trade Alliance (FTA), adding that the increased tariff will help level the playing field for locally manufactured cement and imported cement.

Lagman said that the effective implementation of the safeguard measure and under fairer competition environment, more manufacturers will be in a position to reduce prices and to offer government preferential pricing in view of the prospect of recovering sales volume.

He said that even before the implementation of the safeguard, three cement firms have already announced price reductions.

He said imported cement competed unfairly against local cement because while imported cement are brought in at dumped prices, they are sold at the same price as local cement.

"This led to a loss of almost a fourth of the market to imported cement causing manufacturers’ cost to soar because their cost had to be spread on lower volumes. The unfair competition also prevented local manufacturers from lowering their prices, since importers would simply engage them in a price war that local manufacturers could not afford considering their high manufacturing and operating costs," he explained.