The Philippines: No extension for zero duty on cement

The Philippines: No extension for zero duty on cement
Published: 01 December 2009

Trade and Industry Secretary Peter B. Favila will not endorse the extension of the zero duty on imported cement noting it is just a month longer before the zero duty regime in ASEAN takes effect.

“I will leave it to the Tariff Commission to assess the situation if we have to extend the tariff or not,” he said. Favila also hastened to add that, “It’s just a month away before ASEAN go tariff-free.”

Imported cement, however, is not sourced from ASEAN, although Favila said that Indonesia could supply cement to the Philippines. It could be recalled that Malacañang issued Executive Order 766 on November 19, 2008 lifting the five per cent most-favoured nation tariffs on cement and three percent tariffs on imports from ASEAN to encourage importation and eventually lower the prices of local cement.

The privilege was extended for another six months effective June this year under EO 819. Already the Tariff Commission has conducted a public hearing among stakeholders to determine whether there is a need to extend the zero-duty importation privilege for the second time or not. While the duty-free privilege has not resulted in the reduction in the price of cement, it was mainly responsible in maintaining the prices at P205 per bag of cement per 40kg bag since late last year.

The BoI, however, said that based on their estimates cement prices should have gone down to around P175-180 for every 40kg bag. Since the lifting the cement tariffs, no cement importation have entered the country except for the controversial importation of 10,000 bags of cement by Topway Builders Inc.

The Philippine Constructors Association (PCA) has given the government a free-hand in deciding whether to further extend the duty-free importation of cement. PCA president Anthony L. Fernandez told reporters their only concern is to keep prices of construction inputs down.