The Tariff Commission has looked at all the arguments. It should now be ready to make a decision regarding the provisional tariffs imposed on imported cement last year.
This is a matter of great consequence to our domestic cement industry. In fact, to call this an existential moment would not be much of an exaggeration.
In a matter of a few years, cement importation surged dramatically from several thousand tons to several million. Obsolete plants in Vietnam account for much of the imported cement. That country’s own government wanted these plants decommissioned.
A highly profitable cottage industry of “pure” cement importers grew over the past few years due to the fact that goods from our neighboring Southeast Asian countries could enter our market tariff-free. This cottage industry pays not taxes, creates no real jobs, require no investment in building plants and yet flood our market with possibly substandard construction material.
The boom in the local construction sector and government’s ambitious infrastructure modernization program caused the surge in cement importation. Over the next few years, government plans to spend P8 billion for the ‘Build, Build, Build’ program. This had the unintended effect of prolonging the life of aging Vietnamese cement plants due for decommissioning.
To check the surge and protect Filipino jobs and industries, the DTI imposed a 4% tariff on cement imports last year. That did not stop the surge. In the first quarter of 2018, cement imports rose to 1.06 metric tons. In the first quarter of this year, with the provisional tariffs in place, imports rose further to 1.74 million.
Republic Act 8800 or the Safeguard Measures Act mandates government to enforce measures to protect domestic industries from serious injury caused by a surge in imports. This law comes into play in considering whether the provisional tariffs on cement importation ought to be extended or even made permanent.
The decision will either favor domestic industries or the “pure” importers. There are important matters that must be seriously considered in coming to a decision.
The local cement industry contributes P24 billion a year in taxes. The importers contribute nothing.
The local cement industry contributes P155 billion to our annual domestic production. The importers contribute nothing.
The local cement industry supports 165,000 Filipino jobs. The importers create virtually none.
The local cement industry has put in investments of between P20 to P30 billion in plant facilities. The importers put in none.
The local cement producers are accountable for quality, supply and price. The importers are not.
Domestic production helps strengthen the peso. Importation undermines the currency.
In a perfect world, trade should happen without tariff distortions. But in the case of the cement supply, the conditions are obviously imperfect.
Game of Chairs
Even as the dust from the last poll has yet to settle, incumbent and incoming senators have agreed to continue with the Upper Chamber’s leadership. Sen. Tito Sotto has apparently maneuvered adeptly to secure his Senate Presidency.
By contrast, the speakership is very much an open question at the House of Representatives. There is much feverish networking going on. Several names have been mentioned as potential Speaker of the House.
For the first time ever, the party-list representatives have emerged as a crucial bloc in deciding the leadership question in the Lower Chamber. A group of about 60 mainly party-list legislators have come together and decided to choose as a bloc. The party-list legislators no longer want to be treated as second-class congressmen.
This is a most significant development. By voting as a bloc, the party-list legislators will likely define the outcome of the leadership contest at the House – overshadowing formal party affiliation.
The other day, the party-list bloc interviewed the three leading contenders for speakership: Leyte’s Martin Romualdez, Marinduque’s Lord Allan Velasco and Taguig’s Allan Peter Cayetano. That event seems to signal that the real race is now limited to the three.
The party-list bloc’s emergence as a major, and timely, player could alter the dynamics in the speakership game. Traditionally, the President, through winks and nods, basically chooses the Speaker. Today, if President Duterte is even up to it, he will likely hew closely to the actual majority drift in the House.
All three are unquestionably Duterte loyalists and loudly proclaim adherence to his program of government. The President’s will likely choose the contender who could best manage congressional affairs and ensure effective delivery of the administration’s legislative agenda.
Cayetano rests his bid almost entirely on the promise supposedly made by President Duterte to make him Speaker. If there was, indeed, such promise, so much water has flowed under the bridge since then.
Velasco is considered too junior to properly fit the role he aspires for. His past performance did not bring him the prominence and credibility required for the post. His father’s rather colorful career in the judiciary could actually become a liability.
Romualdez, has his Cornell University training and a solid record in banking and finance as assets. He has the confidence the business community but his family linkages could be a source of controversy.
Should President Duterte, as he says, step back and leave the leadership matter entirely to the congressmen, the door will be open to two powerful women who are not formally part of the decision-making to play discreet roles.
Sara Duterte publicly disclaims any role in the selection of the next Speaker. But the congressmen will consider her dispositions very seriously.
Outgoing Speaker Gloria Macapagal Arroyo will not play any overt role. But she has enough allies in the chamber to matter.