Cement prices going up ahead of safeguard duty

Local cement manufacturers are raising prices by as much as 110 per bag starting today, January 14, and ahead of the expected provisional safeguard measure which will impose a punitive duty on imported cement.

Traders and retailers said that cement prices will start going up effective today. Retailers said their capital now is 1220 per bag.

Napoleon Co, chairman of the Philippine Cement Importers Association, said cement firms raised prices as they have to commit not to hike prices once the provisional safeguard duty is imposed.

On Friday, Trade and Industry Secretary Ramon M. Lopez said their initial motu propio investigation showed there has, indeed, been a “surge” in cement importation in the last four years. The import surge has hurt the industry and sales of cement manufacturers.

Based on their findings, import volume has been consistently growing from only 3,558 metric tons in 2013. This doubled in 2014 and jumped to 272,088 MT in 2015. Cement importation breached the millionMT mark in 2016, reaching 1,767,123 MT and almost doubled in 2017 with 3,042,458 MT.

Domestic production also tried to catch up with the growing demand with higher capacities. From 2013, domestic volume was placed at 16,581,000 MT growing to 18,456,000 MT in 2014 up to 20,636,000 in 2015 and improving a bit in 2016 to 20,782,000 MT. However, local cement production declined by 1.5 percent in 2017 to 20,470,000 MT as imports continued to rise.

Combined with imports, the total apparent Philippine cement market was placed at 23,512,458 MT in 2017.

The DTI report also showed that sales value of cement producers have been affected by the surge in imports. Sales value of cement makers registered increases of 11.62 percent in 2013 and 14.61 percent in 2015. But the growth in sales value tapered to 2.79 percent in 2016. In 2017, local cement makers suffered a huge sales decline of 11.64 percent.

Lopez, who will be meeting with the importers group on Tuesday, cited the need to balance the interest of local industries against the influx of imports. He stressed that there has been enough local capacity to meet local demand.

The DTI is pursuing a Manufacturing Resurgence Program where construction is one of the priority sectors. Lopez explained that if the domestic industry is fully developed, there will be more jobs, higher import substitution and benefits to consumers.

The DTI is pursuing new investments in the cement manufacturing and the industry is also trying to beef up production, he explained.

Should the DTI push through with the imposition of provisional safeguard duty, Lopez said that prices will be assured to protect consumers. The DTI will also set a maximum or trigger prices by which the punitive duty can be suspended.

He also allayed fears that the safeguard duty might hamper the government’s massive infrastructure program stressing there is enough local supply and imports will still continue. (BCM)