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The Department of Trade and Industry approved the imposition of a provisional safeguard measure on imports of cement from various countries
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This, after an initial investigation found increased imports caused substantial injury to the domestic industry
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Under DTI Department Administrative Order 25-01, the provisional safeguard measure will be in the form of a cash bond amounting to P400 per metric ton or P16 per 40-kilo bag classified under AHTN Code Nos. 2523.29.90 (ordinary Portland cement) and 2523.90.00 (blended cement)
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Imports from developing countries listed in DAO 25-01 will be exempt but are required to submit a certificate of origin
The Department of Trade and Industry (DTI) approved the imposition of a provisional safeguard measure on cement imports from various countries after its initial investigation found increased imports caused substantial injury to the domestic industry.
The provisional safeguard measure will be in the form of a cash bond amounting to P400 per metric ton (mt) or P16 per 40-kilo bag classified under AHTN (Association of Southeast Asian Nations Harmonized Tariff Nomenclature) Code Nos. 2523.29.90 (ordinary Portland cement) and 2523.90.00 (blended cement), according to DTI Department Administrative Order (DAO) No. 25-01 dated February 20.
Imports from developing countries listed in DAO 25-01 will be exempt but are required to submit a certificate of origin.
The imposition of provisional safeguard measure is pursuant to Republic Act (RA) No. 8800, or the Safeguard Measures Act, which authorizes the imposition of such measure “in critical circumstances where a delay would cause damage which would be difficult to repair, and pursuant to a preliminary determination that increased imports are the substantial cause of injury to the domestic industry.”
DTI last year initiated a preliminary investigation to determine whether increased imports of cement from various countries is causing or threatening to cause serious injury to the domestic industry.
READ: DTI considers safeguard measure on cement imports
DTI said based on evidence and submission of interested parties, it established after a preliminary investigation the existence of a causal link between the increased imports of the subject products and serious injury to the domestic industry.
In a report dated February 20, DTI said the significant increases in the volume of imported cement from 2019 to 2023 preceded the serious injury to the industry in 2023.
While the apparent market contracted throughout the period of investigation (POI) from 2019 to June 2024, except in 2021 when the economy started recovering from the COVID-19 pandemic, the conditions of the competition showed that the market share of local cement producers decreased during the POI from almost 78% in 2019 to almost 68% in 2023, as imports in the domestic market displaced locally-produced cement from approximately 22% market share of imports in 2019 to 32% in 2023.
Moreover, DTI said the domestic industry suffered serious injury by experiencing declining sales, production, capacity utilization, profitability, and employment except in 2021. The condition of the domestic industry worsened in 2023 when imports recorded its highest market share at 32% while the domestic industry shrank to the lowest level of sales.
In addition, the domestic industry’s lowered price even with the rising cost of production compete with the imports has impacted the domestic industry’s profitability, recording its first operating loss in the POI.
DTI said it established that imposition of the provisional safeguard measure shall be in the public interest.
“With the commitment of the domestic industry to upgrade its facilities, and improve its production efficiency, consumers will have a better and wider range of products to choose from at competitive prices,” DAO 25-01 said.
DTI noted, however, that there is a need to balance protecting consumers with other sectors such as the investors and industries that provide employment to Filipinos. It added there is also a need to moderate imports to balance trade.
If local manufacturers can adequately supply domestic requirements, DTI said they need to be provided a level playing field to enable them to compete with imports to allow the expansion of the industry’s manufacturing base and sales, which in turn will generate more jobs for Filipinos and allow the continuity of employment for the existing employees of the industry.
Further, users/consumers of ordinary Portland cement and blended cement will retain their option to choose between local and imported cement since imports will still be allowed.
DTI said the imposition of the safeguard measure will only be temporary and is not expected to cause a shortage of cement in the domestic market considering that cement manufacturers have sufficient capacity to meet the domestic demand. – Roumina Pablo
