Doing the right thing
THE Department of Trade and Industry (DTI) should receive a pat on the back for imposing safeguard measures on imported cement following a surge in imports that caused injury to local manufacturers.
While cement importation is allowed with zero duty, DTI pointed out that relying solely on imports is downright risky and irresponsible as cement manufacturing is a strategic industry.
Unbridled importation could stunt the growth, or worse, even cause the demise of the local cement industry.
In the past five years, cement imports surged from a measly 3,558 metric tons in 2013 to more than 3,000,000 metric tons in 2017, reaching almost 5,000,000 metric tons in 2018.
By allowing loose cement imports with zero tariff, pure importers’ share of the market grew from only 0.02 percent to 15 percent from 2013 to 2017.
As a result, the local industry experienced a sharp decline in income – earnings before interest and taxes – of 49 percent in 2017. This figure clearly shows the seriousness of the injury unabated importation is causing local manufacturers.
Consider this: the local industry directly employs some 42,000, with additional 125,000 jobs contributed throughout the value chain.
An estimated 1155 billion or close to 1 percent of the total GDP is contributed by the cement manufacturing industry which it projects to double and directly or indirectly employ 400,000 workers in 2030.
In contrast, pure importers hardly generate jobs for Filipinos and contribute very little value or nothing at all to the entire industry supply chain.
Their threat of rising prices of cement is without basis as the domestic capacity of 35 million metric tons (MT) a year is enough to meet the growing local demand, with future increases in demand covered by new plants coming online.
The safeguard measures will encourage domestic cement manufacturers to increase capacities and modernize to compete globally. Consequently, more jobs will be created for Filipinos.
Contrary to what the pure importers claim, the DTI acted in the interest of the country in imposing the safeguard measures. Hence, these measures must be put in place permanently by the Tariff Commission.