By Bernie Cahiles-Magkilat
Cement traders said they will appeal the decision of the Tariff Commission, which recommended the imposition of a P12 definitive safeguard per 40-kilogram bag on imported cement as they protest the use of incomparable data in coming up with this specific duty.
Ed Sahagun, president and CEO of Philcement Corp. one of the leading cement importers, said traders will meet and file their appeal to Trade and Industry Secretary Ramon M. Lopez soon.
Traders said that the TC should have used as comparison the ex-warehouse price of the importers and the ex-plant price of local integrated cement manufacturers. In coming with the definitive safeguard measure, the TC used the weighted average landed cost of imported cement as against the average domestic ex-plant selling price of the local manufacturers.
Sahagun stressed that importers incur as much as $6-$8 per ton or P408 per bag in additional cost from warehousing, hauling, security, electricity among others. So the price difference should not have been P297 per metric ton but higher based on the estimated additional P408 per ton cost of importers, erasing the supposed cost advantage enjoyed by importers.
“The data used is not comparable,” Sahagun said.
Nonetheless, Sahagun said they will continue importing because it will still take time for the definitive safeguard measure to take effect given the Bureau of Customs’ adjustment to the new rate. He also cited the appeal process, which could go up to the Court of Appeals and even up to the Supreme Court if necessary.
Napoleon Co, chairman of the Philippine Cement Importers Association, explained that the landed cost of P3,578 per metric ton or $68.80 per ton (cost and freight) did not include the more than P250 per ton stevedoring and arrastre costs of importers. The cost of importers outside of Manila would even be higher.
Trucking to warehouses and cost of warehousing can add up P150 per ton. Delays in issuances of Statement of Confirmation from the Bureau of Product Standards could take days or weeks contributing to additional cost to importers, he added.
Co said that imported cement have been complimenting local plants, which could not meet local demands.
Cement demand was estimated at 34 million tons against production of around 28 million tons. The 6 million ton in supply shortage have been filled by imports from both the local manufacturers themselves and the traders.
“So, unless local plants can really increase their productions fast, there will be shortfall in supply,” he said.
“With the P12 per bag in additional cost, I just hope local plants will not increase their prices,” said Co adding that importers will stop importing if they could no longer compete with the local prices.
“We’re hoping there would be no serious price increases or the general consumers will suffer. So, we are asking the DTI Secretary to review the figures,” he said.
For his part, DTI Secretary Ramon M. Lopez, who initiated the motu propio investigation on cement importation and slapped imported cement P8.40 per bag in provisional safeguard measure, welcomed the TC findings, after a series of public consultations, that there was injury to the industry, and that the safeguard duty should be P297 per MT or P12 per 40-kilo bag. The TC definitive safeguard measure was P3.60 higher than what was provisionally granted by Lopez.