A total 1,626,256 tons of the foreign-made cement was brought in at "dumping" prices by nine importers and traders, dominated by seven local trading firms and the two foreign-owned Taiwan Cement Corp. (TCC) and Southern Cross Cement.
Official records on file with the Department of Trade and Industry (DTI) show that half or 729,613 tons of the local shipments of the major importers from January to October was cornered by the seven local import/trading houses, which have so far posted a combined profit of P364.8 million, based on a conservative profit of P20 per bag or P500 per ton.
In the years 1999 and 2000, this cartel of cement importers shipped in more than three million tons of cement from Indonesia and Taiwan at landed costs of only P52 and P86/bag, according to the Customs bureau. Its seven members made a killing in those two years by retailing their goods here at a high price of P137-P150/bag, a level almost equal to the selling price of local cement.
The unfair trade activity of the cement importers, which Customs officials claim included technical and outright smuggling, led to the closure this year of four Philippine cement plants, immediately displacing more than 23,000 cement industry workers and their families, who now face a bleak Christmas. Cement importers generated minimal employment compared to the thousands employed by the Philippine cement industry.
This prompted the DTI to slap a 200-day provisional tariff of P20.60 per bag on imported cement to protect the local cement industry from injurious imports and to level the playing field, which previously tilted in favor of the importers engaged in "dumping."
In trade parlance, dumping happens when goods shipped to another country are sold at prices much lower than in their home or source countries, Taiwan and Indonesia in the case of cement, triggering the DTI move in compliance with Republic Act 8800, otherwise known as the Safeguard Measures Act.
The law specifically mandates the DTI and the Department of Agriculture to provide safety nets (tariff and non-tariff protection) to Philippine products that fall prey to unfair trade practices such as "dumping" and smuggling.