DTI defends plan to raise safeguard duty on imported cement

The Department of Trade and Industry on Friday defended its decision to impose higher safeguard measures on imported cement to allow the local industry to recoup lost opportunities.

DTI Bureau of Imports director Luis Catibayan said the agency would continue to protect local industries to restart and rebound from the impact of the pandemic.

“The DTI secretary has the discretion to increase the safeguard duties on an imported commodity or product. It is well within the authority of the secretary to exercise for this power based on national interest,” he said.

He said the Tariff Commission’s role was to identify causation if the level of importation caused serious injury to the domestic industry.

Catibayan said in the case of cement safeguard duties, the DTI found out that imports continued to increase despite the P10-per-40 kilogram bag safeguard tariff imposed on Oct. 22, 2019 until Oct. 21, 2020 in the first year of the safeguard implementation.

The safeguard duty was supposed to go down to P9 per bag of cement in the second year, but the DTI agreed to make it P9.80 per bag. Cement importers tagged it a possible case of “an abuse of authority”.

Catibayan said the imposition of the safeguard measure was to redress the serious industry to domestic industry. “The DTI found out that notwithstanding the P10 definitive tariff, cement imports continue to come in,” Catibayan said.

He said that under the rules of the World Trade Organization and under Philippine laws, the DTI could not increase the safeguard duty in the first year because of a requirement to progressively liberalize the duties.

“But on the second year, the secretary can determine the appropriate duties which will redress serious injury to domestic industry. The only requirement is that the safeguard duties should be progressively going down from the first tranche or first year of implementation,” he said.

The P10-per-bag safeguard duty was imposed in 2019 when imports increased by 12 percent from a year ago. The local cement industry said imports further increased in 2020.

Data gathered by the Cement Manufacturers Association of the Philippines showed that cement imports from January to August 2020 were equivalent to 73 percent of total imports in 2019. The group said the annualized import volume may have increased by 9 percent in 2020 despite the safeguard duty.

Trade Secretary Ramon Lopez issued Department Administrative Order No. 20-08 on Oct. 26, 2020 setting the definitive safeguard duty at P9.80 per bag of cement classified under AHYN Codes 2523.29.90 and 2523.90.00. This was lower than the P12 duty requested by CeMAP.

The second tranche of safeguard duty will cover Oct. 22, 2020 to Oct. 21, 2021.