P8.40 Tariff on Imported Cement: Good for Local Cement Companies?

Local manufacturers are making a case about an ongoing problem for some years already. Part of the economic platform of the government is the Build Build Build program. This program has an estimated budget of P8 trillion until the end of the term of the Pres. Rodrigo Duterte.

Local manufacturers started upgrading their investments. State-of-the-art machineries were installed to lower costs. Still, the local industry suffers as an influx of imported cheaper cement poured in. The market share of importers is now at 15 percent from only 0.02 percent in 2013. The problem is that local companies’ cement prices are still way above the prices of imported cement.

Local manufacturers also pointed out that the industry provides a huge chunk of the labor force of the country. The Cement Manufacturers’ Association of the Philippines (CEMAP) made a forecast. Around 110,000 short- to medium-term jobs and up to 400,000 direct and indirect jobs would be generated by 2030.

CEMAP wants to start seeing the return on investments on the huge capital expenditures that they have already made. The cement industry also has to keep up with the faster technological advancements. This shows the need to continually reinvest in new technology and observe stringent environmental standards.

Four manufacturers account for 82 percent of local production. Steps have been taken to meet their current capacity of 29 million tons. This is more than enough to cover the foreseen growth of 12 percent annually as estimated by the DTI.

The government has recently put out some safeguards to protect the local industry. The DTI implemented a 4 percent increase or PHP 8.40 tariff on imported cement. This will raise the prices of imported cement. It makes the prices for domestic produce to be competitive. This week is the expected effectivity. However, this is only temporary and would run for 200 days. The DTI will observe if supply will still be enough and the rise in cement prices would be manageable.

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Jaycee De Guzman

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