Philippines: clinker-based companies may not get perks

Philippines: clinker-based companies may not get perks
Published: 26 April 2010

The Board of Investments (BoI) is rethinking plans to grant incentives this year to clinker-based cement factories, considering instead just securing manufacturer commitments to raise output when supply runs short.

Cement companies have been ordered to submit data on their idle capacity to help the agency reach a decision, BoI Managing Head Elmer C. Hernandez told reporters at the sidelines of a car launch last Friday.

The BoI earlier said it was considering tax perks for clinker-based cement factories under the specific guidelines of the 2010 Investment Priorities Plan (IPP) as this type of production - which needs only to grind purchased clinker - can start operations faster than a greenfield project.

The state agency has submitted a general list for Malacanang’s approval which proposes incentives this year for cement production. It can refine this further via the specific guidelines currently being drafted by limiting what type of cement production can enjoy tax perks.

The Cement Manufacturers Association of the Philippines (CeMAP), however, has opposed a bias for clinker-based factories, arguing it would disadvantage existing firms that sunk millions of pesos into greenfield projects.

Consequently, the BoI has asked for data from cement manufacturers on how quickly they can ramp up production to respond to shortages, Mr. Hernandez said.