Philippines: cement makers asked to explain prices

Philippines: cement makers asked to explain prices
Published: 03 October 2008

The Department of Trade and Industry (DIT) is considering subpoenaing cement companies that are slow in complying with a request for information relating to recent price increases, Trade and Industry Secretary Peter Favila said.

The cement makers are apparently dragging their feet about the matter, he said in an interview. “ received word that they seem to be being less than helpful.”

Last week, Favila said the DTI was awaiting documents from Holcim and Lafarge that would explain more substantially why they increased prices by P10-P12 per 40-kilogram bag.

Latest monitoring by DTI show that cement prices in Metro Manila at between P190 and P195 a bag.

Favila said he was prepared to make unpopular moves especially if consumer welfare was at stake.

Favila said the DTI might recommend removal of import tariffs on cement to have a more affordable supply.

He said he was seriously considering importation and would ask the Bureau of Customs to expedite the release of cement into the market.

“ith zero tariff on cement, we will see imported cement in the country at a more affordable price,”avila said. “f course, the cement will be subjected to tests to ensure that it complies with Philippine quality and safety standards.”

Tariff rates for Portland cement are 3.0 percent for supplies from ASEAN countries and 5.0 percent for shipments from other sources.

A factor in determining cement prices is the price of coal, accounts for 40 percent of variable costs in the manufacture of cement. An industry source said that before a price hike earlier this month, the price of coal from Indonesia had risen 81 percent to $155 per metric ton from about $86 in December.

The source said retail prices of cement in Indonesia and Vietnam had gone up by 25 percent and 58 percent, respectively.

In contrast, Philippine cement prices have gone up by “only three percent to five per cent” since the start of the year.