Solon opposes incentives for new cement makers

Solon opposes incentives for new cement makers
Published: 07 April 2006

Joey Sarte Salceda, chairman of the House committee on appropriations, Philippines, has questioned the timing and motive of a government proposal to grant incentives to new cement players.   "At a time when government is trying to put its fiscal house in order, agencies like the Board of Investments (BoI) should be more circumspect in dangling hefty tax breaks just to lure investments," Salceda said in a statement.   His bill on the rationalization of fiscal incentives is pending in Congress.  
The BoI wants to include cement in the 2006 Investments Priorities Plan (IPP).   So far, only the Chamber of Real Estate Builders Association (Creba) has given full backing on move.   The Cement Manufacturers Association of the Philippines slammed the proposal to provide incentives to new players when the current capacity of the cement industry is still underutilised.  
"If there is real demand, as the BoI and Creba claim, new cement companies will come to the country with or without tax breaks. So why should BoI contradict government policy by giving away potential revenue at a time when Malacañang needs all the help justifying RVAT (reformed value added tax)?" Salceda said. 

Salceda also said industry data showed that cement demand has stayed relatively flat in the past six years. From a peak of 14.89Mt in 1997, he said, demand for local cement fell to 12.9Mt in 1998 and has not changed much since.