THE construction sector is questioning a Department of Trade and Industry (DTI) order seen as an effort to put in place a cartel made up of cement manufacturers-importers who want to bring back cement prices to the P300 per bag level in 2015, from its present price of about P197 per bag.
Industry sources also welcomed the filing of a graft complaint against a DTI undersecretary before the Office of the Ombudsman for his role in issuing department administrative order 17-02/05.
The DAO requires importers to secure an Import Commodity Clearance (ICC), on top of the “PS” or Product Safety mark, for imported cement. The DAO, however, exempts the big cement manufacturers operating integrated cement plants in the country but also importing cement from the ICC requirement.
Several reasons were cited why the DAO 17-02 and subsequent DAOs should be suspended or totally revoked.
“First of all, the DTI order creates an environment which could threaten the stability of the cement prices in the market, as the DAO 17 –02/05 is a surefire formula for prices to spike uncontrollably and for supply to be manipulated,” a construction sector executive said.
The executive added that In 2014, cement price was around P300; when importers entered the picture, the price immediately fell to around P217; currently, the price hovers at around P197.
This, the insider said, “offers solid proof that open competition augurs well for the public.”
“If DAO 17-02/05 was intended to protect the public by ensuring the quality of the imported cement, the business group wondered why both manufacturers-importers and small importers get their cement from mostly the same plant abroad: So, how could there be any difference in quality?” he asked.
The DTI order “actually runs counter to President Duterte’s pronouncement to stop corruption, reduce red tape and improve the ease of doing business in the country”.
In his inaugural speech, Duterte had said: “The fight [against corruption] will be relentless and it will be sustained…I order all department secretaries and heads of agencies to remove redundant requirements and compliance with one department or agency shall be accepted as sufficient for all…[They should] refrain from changing and bending rules, government contracts, transactions and projects already approved and awaiting implementation…Changing the rules when the game is ongoing is wrong.”
The DTI order could actually set back the implementation of the “Build, Build, Build” infrastructure-development program, as cement supply from local manufacturers may not be sufficient to meet the expected big demand for the commodity, industry sources said.