Tariff Commission questions DTI’s cement duty

The Tariff Commission over the weekend questioned the decision of the Department of Trade and Industry to increase the definitive safeguard duty on imported cement by P0.80 to P9.80 per 40-kilogram bag starting October 2020.

“The DTI can’t do that. The schedule has been set. That’s the whole point because the industry should improve so the duty should go down,” TC Commissioner Ernesto Albano said during the public hearing through videoconferencing “¯on the “Monitoring of the Philippine Cement Industry.”

Albano said the three-year schedule of safeguard tariff implementation should be followed according to the law. The safeguard tariff was supposed to drop from 10 per 40-kilogram bag in the first year of implementation to P9 per bag in the second year and P8 in the third year.

The DTI, however, set it at P9.80 per bag in October, which represented the start of the second year of the three-year schedule.

“I am not aware of the DTI order, but this is a schedule of definitive safeguards. By law, it should go down. We will ask if DTI increased the safeguard duties since the rates have been approved, therefore it should go down on the second year,” said Albano.

He said as a regulator, the TC should be on top of industry issues. Albano, however, said the commission did not know that the DTI increased the safeguard tariff on imported cement to P9.80, when it should be at P9 per bag in the second year of implementation.

Cement importers said the DTI “may have committed abuse of authority” based on the statement of the commission.

The industry is now complying with the new cement memorandum order after the Bureau of Customs  started imposing the collection of the new rates, said Philcement Corp.

The TC reiterated during the public hearing the need for safeguards to be competitive and to push through with the agency’s action plans even as some projects were pushed back by the pandemic.

Republic Cement said during the same public hearing that even as the situation improved in the second semester, “still, the year is quite abnormal with unprecedented events. But we hope to see better performance of investments.”

Holcim Philippines Inc. said while it benefitted from completed investments, “… the big investments are delayed which are supposed to install additional clinker capacity that would make us more competitive.”

Cemex Philippines said it had not yet seen the full benefits of their investments because the industry’s situation is not ideal. “The demand was severely impacted and the immediate target was to keep all employees,” it said.

“We are forced to look into every single cost and improve our cost structure,” it said.

Cement companies reported to the TC that they were managing operations with additional costs related to transportation, purchase of personal protective equipment and the cost of swab tests.

The TC subjected imported cement to safeguard tariff of P10 per bag in the first year of effectivity on Oct. 22, 2019 amid the influx of imports that hurt the local industry.