Philippine government keen on removing tariff on imported cement

Philippine government keen on removing tariff on imported cement
Published: 20 October 2008

The Philippine government will proceed with the elimination of tariff on imported cement even if the domestic manufacturers would succeed in convincing the Department of Trade and Industry (DTI) that their recent P10 to P15 price adjustments are fair, reports the Business Mirror.

Trade Undersecretary Zenaida Maglaya said the only way the local cement makers can stop the tariff abolition is if they will bring down their prices to levels that will be acceptable to the DTI.

Maglaya said the technical team of the Committee on Tariff and Related Matters has already recommended to the Cabinet the reduction to zero of the 5-percent to 7-percent tariff on imported cement on a seasonal basis during its meeting on Thursday.

“What we are after with the zero tariff is to bring down the price so it’s more affordable. Anything that will help bring down or reduce cost, the government will adopt it even on a temporary basis,” Maglaya told reporters at the sidelines of the launching of the Security Awareness and Fraud Education program, an initiative of the DTI, Western Union and National Bureau of Investigation to educate the consumers on promotional scams, at the Board of Investments building in Makati on Friday.

Maglaya said cement manufactures Holcim, Lafarge and Cemex have all submitted their individual pricing mechanisms and production costs after Trade Secretary Peter Favila issued a subpoena duces tecum to them.

Favila wants to determine if the local cement firms are committing profiteering after they hiked their prices again recently that brought up the cost of 40-kilogram bags beyond P200.

Maglaya said the DTI is now reviewing the documents.

She said even if the department would find the price increases as justifiable, the tariff will still have to be eliminated because the aim of the government is to bring down the cost of cement in the country.

If the adjustments are not fair, Maglaya said, the DTI will order the cement makers to bring down their prices, otherwise they will be charged with profiteering.

“And if they follow the DTI and lower the cost so as to address the price concerns, the government may no longer see the need to eliminate the tariff on imported cement,” Maglaya said.

She noted that the local cement makers have been careful not to increase their prices by more than 10 per cent per month so as to avoid automatic profiteering.

Under the Price Act, an increase of more than 10 per cent from the previous month’s price would be deemed as profiteering.