THE government has imposed a definitive safeguard duty of P10 per 40 kilogram bag on cement, nearly P2 higher than the previous rate imposed on imports.
Trade Secretary Ramon M. Lopez on Tuesday decided to place a tariff of P250 per metric ton, or P10 per bag, on cement. The rate is almost midway between the provisional duty of P210 per MT and the Tariff Commission’s recommendation of P297 per MT.
The safeguard duty will then go down to P225 per MT, or P9 per bag, on the second year and will further slide to P200 per MT, or P8 per bag, on the third year.
Lopez argued he chose to apply a middle-ground rate to protect the welfare of consumers and the interest of the domestic industry. He said the P10 per bag tariff is enough to safeguard local manufacturers from imports and compel them to stay competitive at the same time.
“Basically, the rationale for the safeguard level is to balance national interest, minimizing the impact to prices for buyers and users while addressing the industry injury issue, and yet still encouraging local manufacturers to continuously pursue inefficiencies to be more globally competitive,” Lopez said in a text message to reporters.
According to Lopez, the definitive rate will be enforced 15 days after the publication of the order in a national newspaper. While the safeguard duty is in place, the domestic industry is directed to comply with its adjustment plan listing their steps to keep up with cheaper priced imports.
In applying the P10 per bag safeguard duty, Lopez rejected the recommendation of the Tariff Commission to place a higher tariff of P12 per bag on cement.
Implementing a safeguard duty of P12 per bag on cement will consequently result in prices of imports going higher. This could leave consumers with no other option but to resort to buying cement produced locally. As a balancing act, Lopez earlier said the government will not come up with a suggested retail price (SRP) on cement for the purpose of managing prices.
The Tariff Commission in August upheld the government’s findings that the domestic industry got injured by the surge of imports between 2013 and 2017. Market share of imports jumped to 15 percent, from 0.02 percent, during the period, leading to a sales loss of 12 percent, or P11.1 billion, for the industry in 2017.
Local manufacturers were compelled to reduce prices by nearly 10 percent to compete with lower priced imports.
In a statement on Tuesday, consumer group Laban Konsyumer Inc. urged the government to study the implementation of an SRP on cement, as the safeguard duty reportedly raised prices of the commodity. According to Laban Konsyumer, retail prices of cement in Metro Manila ranged between P205 and P215 per bag in February, but surged to as high as P240 per bag since the safeguard duty was implemented.