DTI jacks up safeguard duty on imported cement by 8.8%

The Department of Trade and Industry said over the weekend it raised the general safeguard duty on imported cement by 8.8 percent over a 12-month period ending Oct. 21, 2021 to protect the local industry from cheap imports amid the impact of the coronavirus pandemic.

Department Administrative Order No. 20-08 amended DAO 19-13 to impose a safeguard duty of P9.80 per 40-kilogram bag of imported cement, instead of the scheduled rate of P9 per bag in the second year of the three-year tariff protection given to the local industry.

The safeguard duty on cement was supposed to drop from P10 per bag in the first year of the implementation of the safeguard duty to P9 in the second year beginning Oct. 22, 2020 and P8 per bag in the third year. The Cement Manufacturers Association of the Philippines sought a postponement of the reduction in the tariff rate on reports of higher shipment of imports in the second half of 2020 to the prejudice of the local industry.

“There are indications that the significant increase in the volume of imports of cement affected the performance of the local industry. The condition of competition shows that the market share of locally produced cement was displaced even with the imposition of the definitive safeguard duty of P250/MT or P10 per 40-kg bag as the shares of imports in the Philippine market significantly increased, resulting in domestic industry’s increased inventory, reduced capacity utilization and incurred decline in profitability,” Trade Secretary Ramon Lopez said in his latest order.

“The pandemic aggravated the overall operation of the cement industry for the first half of 2020 which resulted in the closure and slowdown of operations due to the quarantine measures and low market demand. The scheduled adjustment plan by the cement industry in 2020 is delayed as the cement industry was unable to quickly resume and complete the necessary investments due to the business disruptions resulting from the quarantine measures implemented to fight the pandemic,” Lopez said.

“Wherefore, in view of the foregoing, and pursuant to Section 13 of Republic 8800, for the second year of the three-year implementing period, a definitive safeguard duty shall be imposed on imported cement from various countries amounting to P245/MT or P9.80 per 40-kg bag covering the period Oct. 22, 2020 to Oct 21, 2021,” he said.

The duty will be applied to cement classified under AHTN Codes 2523.29.90 and 2523.90.00.

CeMAP said cement imports increased by 12 percent in 2019 despite the safeguard duty of P10-per bag imposed on all cement imports.

The group said that from January to August 2020, the level of imports already represented 73 percent of total imports last year. The annualized import volume may increase by 9 percent in 2020, it said.

CeMAP was actually seeking a P12 tariff in safeguard duties for every 40-kg bag of imported cement, based on its July 2020 letter to the DTI.