Local Philippine cement makers are appealing the recommendation of the technical committee on tariff and related matters (TRM) to extend the elimination of duties imposed on imported cement for another six months.
Ernie Ordoñez, president of the Cement Manufacturers Association of the Philippines (Cemap), said the coming months will be critical as some exporting countries are now searching for markets where they could ship their excess cement capacity at “marginal cost.”
He said prolonging the validity of the executive order (EO) temporarily removing the five per cent tariff on cement will go against the global trend of establishing mechanisms to protect the domestic industries.
"So in effect, if we go to zero again, we are telling those who are looking to dump their excess capacity to target us," Ordoñez told the BusinessMirror.
The EO temporarily eliminating the tariff on cement was supposed to expire on June 21. Ordoñez said they are not aware of any EO yet extending it.
But he said Cemap will write a letter to the Cabinet-level TRM to consider their arguments and reverse the decision of the technical committee.
Ordoñez said in the meeting of the Asian Cement Producers Amity Club in Bangkok, it was confirmed that the temptation among producers not belonging to the group to dump to other markets is indeed there.
This, he said, is because with the demand going way below what was earlier projected, there are now excess capacities that need to be unloaded even at marginal or dumping cost.
Edgardo Abon, chairman of the Tariff Commission, said the TRM decided to recommend the extension of the zero-percent tariff as a safeguard against the possibility of spiraling cement prices.
Abon said the recommendation is to extend the validity of the EO for another six months, after which a review will be done by the TRM to determine if there is a need for another extension.