Posts Uncategorized

Cement price cap should be in place alongside safeguard tax on imports

A CONSUMER group on Monday asked the government to put in place the price cap on cement to keep manufacturers in check while a biased policy against imports is in effect.

Laban Konsyumer Inc. President Victorio Mario A. Dimagiba appealed to the Department of Trade and Industry (DTI) to publish the suggested retail price (SRP) on cement that will be used while the safeguard tax on imports is in place. The SRP, he said, will secure prices stability under a protectionist regime on cement.

“SRPs should be at all times be reasonable as the Price Act, as amended, provides as such. The prevailing prices the past three months are baseline data in determining that the SRPs are reasonable,” Dimagiba said in a statement.

“This will eliminate perceptions that retail prices have gone up in anticipation of the safeguard duty now subject of the investigation,” he added.

The DTI had vowed to release an SRP for cement while the safeguard duty of P210 per metric ton on imports is in place. Trade Secretary Ramon M. Lopez said this will also measure if the domestic supply is sufficient, as unwarranted price increases are symptoms of supply deficiency.

Lopez earlier told the BusinessMirror the DTI will most likely adopt the prevailing prices of cement in December of last year as the SRP.

In a document obtained by the BusinessMirror, prices of local cement in Metro Manila range from P220 per 40-kilogram bag to P225 per bag last December.

Holcim-Excel, Republic and Mayon were priced at P225 per bag, while Rizal and Advanced Eagle were sold at P220 per bag in Metro Manila. Prices, however, were lower in Cebu and Davao, but higher in La Union.

December per-bag prices of Apo were at P203 in Cebu and P205 in Davao; Holcim-Excel at P245 in La Union, P195 in Cebu and P220 in Davao; Republic at P235 in La Union, P185 in Cebu and P212 in Davao; Northern at P245 in La Union; and Mindanao at P165 in Cebu.

Dimagiba urged the DTI to complete its promise of safeguard for consumers while the Tariff Commission conducts its own investigation on whether to keep the import tax for long.

“The government should do everything within its power to ensure consumer welfare. The issue of cement prices is yet another issue that must be tackled and taken into consideration,” Dimagiba said.

“We wish that the SRP be issued and published immediately in compliance with the DTI determination related to the safeguard duty on cement,” he added.

Lopez decided to place a price cap on cement to see how supply will respond to the implementation of a safeguard duty. He said unreasonable price increases are indications of supply shortages. The DTI slapped a provisional tax on imported cement after the domestic industry supposedly got injured from the surge in imports from 2013 to 2017.

Market share of imports rose to 15 percent in 2017, from 0.02 percent in 2013, according to figures from the DTI. Further, sales of the local industry reportedly fell 12 percent, or P11.1 billion, in 2017, as manufacturers were compelled to reduce prices by almost 10 percent to compete with imports.