HIGH-STAKES CE­MENT FACE­OFF

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Six thou­sand em­ploy­ees. An­other 115,000 peo­ple em­ployed in­di­rectly through large and small sup­pli­ers. And speak­ing of sup­pli­ers, we’re talk­ing about 4,500 firms that sell ev­ery­thing from raw ma­te­ri­als to fuel to staff uni­forms to food.

That’s what the in­dus­try of do­mes­tic ce­ment pro­duc­ers looks like, com­pris­ing four large cor­po­rate groups that man­u­fac­ture in the Philippines this key in­gre­di­ent for eco­nomic growth.

By the way, th­ese four firms to­gether pay the gov­ern­ment more than P8 bil­lion in cor­po­rate in­come taxes an­nu­ally.

Un­for­tu­nately for its many stake­hold­ers, the do­mes­tic ce­ment in­dus­try is un­der siege by ce­ment im­porters who are mak­ing sig­nif­i­cant in­roads into the lo­cal mar­ket, thanks to the cheaper prod­ucts they sell in the mar­ket.

How much cheaper? A dis­count of as much as P20 per bag of ce­ment, ac­cord­ing to our sources. That may not sound like much for qual­ity-con­scious con­glom­er­ates build­ing multi­bil­lion-peso in­fra­struc­ture projects. But that price vari­ance makes a world of dif­fer­ence for re­tail ce­ment buy­ers, es­pe­cially out­side Metro Manila.

So what’s the prob­lem? Do­mes­tic ce­ment pro­duc­ers want to level the play­ing field by hav­ing the fin­ished prod­ucts of im­porters sub­jected to the same rig­or­ous qual­ity con­trol process the lo­cally man­u­fac­tured ce­ment is sub­jected to.

That means hav­ing ce­ment im­ports go through a rig­or­ous in­spec­tion process un­der the aus­pices of the Depart­ment of Trade and In­dus­try. This is be­ing op­posed by ce­ment im­porters who ar­gue that their im­ported prod­ucts are al­ready sub­jected to qual­ity con­trol at their ori­gin, whether China or Viet­nam.

This doesn’t hold wa­ter with the lo­cal man­u­fac­tur­ers, of course, with one of their of­fi­cials re­tort­ing about how easy it is to forge th­ese cer­ti­fi­ca­tion doc­u­ments: “You want an in­spec­tion cer­tifi­cate for ce­ment im­ports? Tell me which coun­try you want it from and I’ll give you one in five min­utes from Recto.”

An­other large do­mes­tic player pointed out that, de­spite the slight premium on lo­cally pro­duced ce­ment, it is a small price to pay for the peace of mind of know­ing that the struc­tures one builds with them are sturdy and sta­ble.

“We have our trade names on those bags of ce­ment that we sell,” said one of­fi­cial in his nasal Span­ish-Filipino ac­cent. “Th­ese im­porters though, you don’t know where they get their ce­ment. And if the struc­tures [built with this ce­ment] col­lapses, who will you go af­ter? Who is li­able? There’s no ac­count­abil­ity.”

Thank­fully for the do­mes­tic man­u­fac­tur­ers, Trade Sec­re­tary Ra­mon Lopez is on their side, and so is Trade Un­der­sec­re­tary Teodoro Pas­cua (the lat­ter be­ing the depart­ment’s con­sumer ad­vo­cacy chief).

But given the bil­lions of pe­sos in­volved in this key in­dus­try, don’t ex­pect the dis­pute be­tween ce­ment man­u­fac­tur­ers and im­porters to end soon, not with both sides claim­ing to have Pres­i­dent Duterte’s ear with their re­spec­tive ad­vo­cates.

This early, how­ever, there seems to be a light at the end of the tun­nel, cour­tesy of a so­lu­tion that DTI is work­ing out with the Bu­reau of Prod­uct Stan­dards.

If plans don’t mis­carry, au­thor­i­ties plan to stream­line the in­spec­tion process for ce­ment im­ports, sharply cut­ting down the num­ber of days th­ese prod­ucts will have to be held in a ware­house (an added cost for the peso-con­scious im­porters). Biz Buzz hears that the cur­rent in­spec­tion du­ra­tion of up to 60 days may be cut in half— some­thing that may as­suage im­porters and the qual­ity-con­scious man­u­fac­tur­ers.

But the proof of the pud­ding is in the eat­ing. Can the DTI ham­mer out a so­lu­tion amid this po­lit­i­cally charged tug of war? Aban­gan! —DAXIM L. LU­CAS

Dominguez’s quick prob­lem res­o­lu­tion

It ap­pears that at the Depart­ment of Fi­nance, they give no quar­ter to work­ers who treat the Duterte ad­min­is­tra­tion’s anti-cor­rup­tion drive as mere guide­lines in­stead of the law of the land.

Re­call that DOF di­rec­tor who re­cently pack­aged a birth­day cel­e­bra­tion with a tech­ni­cal writ­ing sem­i­nar in the swanky Edsa Shangri-La ho­tel—all funded by the Asian De­vel­op­ment Bank?

Well, this di­rec­tor of­fered to re­sign a day af­ter the in­ci­dent first came to light in this very col­umn.

No less than Fi­nance Sec­re­tary Car­los Dominguez III told us he had ac­cepted the res­ig­na­tion af­ter a swift in­ves­ti­ga­tion.

The DOF di­rec­tor was also told to pay the ADB-ad­min­is­tered tech­ni­cal as­sis­tance fa­cil­ity the full amount of the “in­ap­pro­pri­ately in­cluded” birth­day din­ner for some 40 guests. The amount, we heard, was in the vicin­ity of P80,000.

We don’t know about you, but as far as in­ves­ti­ga­tions go in any of­fice—pub­lic or pri­vate—that was pretty quick.

The in­ves­ti­ga­tion was done with the help of the ADB.

Ac­cord­ing to Dominguez, the di­rec­tor was told to con­duct the work­shop in the Ayun­tamiento de Manila in In­tra­muros “with­out din­ner and charged to the depart­ment’s reg­u­lar bud­get.”

In­stead, this di­rec­tor or­ga­nized “with­out prior clear­ance” the Edsa Shang work­shop. The birth­day cel­e­bra­tion that fol­lowed was listed as a din­ner for work­shop par­tic­i­pants. The en­tire event ran from 8 a.m. un­til 11 p.m.

Of course, it is un­for­tu­nate for one’s ca­reer to end in this man­ner.

But as we pointed out pre­vi­ously, it was a re­cur­ring is­sue and the con­tro­ver­sial birth­day bash might have been the last straw for gov­ern­ment staffers.

Dominguez said their in­ter­nal pro­cesses are be­ing im­proved to avoid sim­i­lar sit­u­a­tions in the fu­ture.

The take­away from all of this is that peo­ple are al­ways watch­ing and, fi­nally, there are those lis­ten­ing as well. —MIGUEL R. CAMUS INQ

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