With cement price high, why ban cheap imports?

We know that Trade Secretary Mar Roxas will know how to handle cartels and the like, but it won’t hurt if President Gloria Macapagal-Arroyo nudges him about the rapacious overpricing of cement.

Not content with squeezing consumers with its manipulation of supply and prices, the foreign-controlled cement cartel now wants to block cheaper cement imports by slapping them with excessive tariff.

If the government, particularly the trade department, succumbs to the lobby of the Philippine Cement Manufacturing Corp. (Philcemcor) for a "review" of the policy on cement imports, it could mean the end of cheaper cement from foreign suppliers and the soaring of local prices.

* * *

After giant foreign firms started gobbling up the cement industry some years back, the price of cement rose from P45 per bag in 1998 to some P118 early last year.

The Philippine Construction Association, which is among the biggest bulk users of cement, moved to ease importation, resulting in the stabilizing of prices at P100 for a while.

But the stop-gap importation measure was not enough to stem the manipulation of the cement market. The price continued to rise. It is now P134 per bag, and is likely to go higher if the lobby succeeds in curtailing imports.

* * *

The powerful cartel is pressing the government to impose stricter "safeguards" against importation. It wants an import quota imposed and a 50-percent tariff slapped on imported cement on top of the present 5 percent.

A tariff policy review per se may not be that bad, but the Bureau of Import Services under the Roxas’ department is likely to require importers to deposit the amount corresponding to the proposed tariff increase while the review is ongoing.

That deposit, easily P50 per bag, will naturally be passed on to consumers by importers, with the end result of the cartel again succeeding in blocking cheaper imports and tightening its hold on the market.

* * *

This is akin to the zealous objection of the oil cartel to the setting up of a national Oil Exchange to take charge of the sourcing – including their importation, if necessary – of cheaper gasoline and other refined oil products.

The oil cartel is afraid of the OilEx because it would show that cheaper fuel can be made available through a mechanism of open bidding and negotiation with refiners and traders worldwide.

Since the oil cartel will not slash its own throat, the government should handle the open and transparent sourcing of cheaper oil products through the OilEx as proposed in a bill filed in the current 12th Congress by Bataan Rep. Enrique T. Garcia.

* * *

The cement cartel, now controlled by foreign operators who bought up local factories when the industry fell on hard times some years back, is fighting importation of cheaper cement on the ground that it would harm the industry.

But why protect a cartel to the detriment of consumers and the economy in general? While cement is being sold now at the shameless price of P134 per bag, the same cartel is exporting cement at an average price of $20 per metric ton or P35 per bag!

The cartel’s net profits amounted to P9 billion last year, according to an analysis of an outside group. Even after its claimed deficit of P4.8 billion in 2000 is deducted, a P5.3-billion profit is left to the cartel that is claiming to be going through hard times.

The trade department cannot be blind to this. Neither can President Arroyo pretend that this overpricing of a critical item in the housing and construction industries will not torpedo her administration’s avowed programs for the poor.

* * *

Mass housing, which GMA is pushing as part of her courtship of the masses, will never take off as long as a critical component like cement is overpriced. Neither can the economy rebound if the construction business is down.

In ordinary houses, cement accounts for around 70 percent of the total cost of the dwelling. Cement is used in all the parts except the roof, the doors and the windows.

At the artificially high price of P134 per bag, and rising, GMA better bid goodbye to her mass housing dreams.

Should Secretary Roxas allow himself to be a party to the cement cartel’s sabotage of the government housing program? Is the trade department insensitive to the plight of the moribund construction industry whose downstream multiplier effects on the economy are incalculable?

* * *

PHILCEMCOR was organized in the late 60s by local cement factories that were 100-percent owned by Filipinos. Its objective is to protect the cement manufacturers. After Filipino owners sold out, however, foreign interests took over.

The trade department should note that one of the activities of Philcemcor is determining the production quotas of each cement plant. The object is to prevent a flooding of the market, ensure uniform pricing, and prevent destructive competition.

Sources said that the group has an auditing unit that keeps track of production and market data and sets limits to the stock that each company may unload.

* * *

Columnist Chit Lijuaco writes of an encounter by her friend of a strange kind at the office handling the Catholic Mass Media Awards.

Rushing to the CMMA office to beat the deadline for the filing of nominations, her friend overheard a CMMA staff assuring somebody on the phone that he could submit their nominated articles the next day.

What for is the deadline and all that hurrying by nominees, Chit asks, if favored media entities are given special treatment?

* * *

We question not only the reported (or suspected?) discrimination, but the matter of nomination itself.

If any media personality or entity deserves recognition, he/she/it should get it without being required to submit a nomination form complete with clippings, portfolios, et cetera.

It is beneath the dignity of anybody in media to nominate himself and chase awards.

How can award-giving organizations justify their choices if they evaluate only what is submitted to them? Are we to understand that the judges are barred from recognizing deserving media whose materials were not submitted for evaluation?

* * *

Some years back (we won’t give the year so we don’t embarrass the awardees), there was this so-so scion of a prominent family who approached us to help him put together a public relations campaign to boost him as a potential awardee in a prestigious program for youthful achievers.

We were scandalized at his presumptuousness, and rejected the idea. Later we learned he got a top advertising-public relations agency to handle his campaign. After a few weeks, we saw glowing features about him, pictures and all, in selected media.

To the unwary reader, listener and viewer of the media campaign of this trying-hard nominee, he was an outstanding role model in his area. The expensive, but expert, marketing of the person was fantastic – and successful.

In short, despite what we know of him, he came out one of the awardees.

* * *

If we may give unsolicited advice to First Gentleman Mike Arroyo, we would tell him to submerge himself and stop talking about affairs of state and issues that impinge on his wife’s presidency.

Talking out of turn is a lose-lose situation for him. He cannot win any point in that department.

If he wants to claim his spot in the limelight, however, he should confine himself to social work, beautification or some credible advocacy like some project having to do, genuinely, with environment, or animal care, or the arts.

Even with these concerns that are supposed to be apolitical, he could still trip, what with political foes and business rivals doing their best to destroy the President through her husband.

* * *

POSTSCRIPT: You can catch Postscript in our personal website at http://www.manilamail.com. Come visit us there. For reactions, you can e-mail us at <[email protected]>