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The Department of Trade and Industry is considering imposition of safeguard measures on cement imports
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The agency is initiating a preliminary investigation to determine if increased cement imports is seriously harming the domestic cement industry
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Evidence showed significant increases in the volume of imported cement from 2019 to 2023, according to a DTI report
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The market share of local cement producers decreased from 78% in 2019 to 68% in 2023, as imports in the domestic market displaced locally-produced cement
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DTI noted the weighted average landed cost of imports is lower than the average selling price of the domestic product, indicating a price undercutting of 24%
The Department of Trade and Industry (DTI) is considering imposition of safeguard measures on cement imports.
The agency is initiating a preliminary investigation to determine whether increased cement imports is causing serious injury to the domestic cement industry.
In notice dated October 28 signed by acting Trade Secretary Ma. Cristina Roque, DTI invited interested parties to submit their comments, including their views on whether the imposition of a safeguard measure is in the public interest.
The cement covered by the investigation is classified under Association of Southeast Asian Nations Harmonized Tariff Nomenclature Codes 2523.29.90 and 2523.90.00.
In a report also dated October 28, DTI said it found evidence to initiate and conduct a preliminary safeguards investigation.
According to the report, DTI, through its Import Surge Monitoring System, recorded a surge in cement imports of combined Portland and blended cement from several countries for the period of investigation (POI) covering 2019 to June 2024.
On August 22, 2024, DTI informed the Cement Manufacturers’ Association of the Philippines (CEMAP) of the increase in imports of Portland cement from 2019 to June 2024 and requested the association to provide data on relevant economic factors for the evaluation of injury to the industry set under Republic Act 8800 (Safeguard Measures Act).
On August 28, 2024, DTI received individual submissions from CEMAP members Republic Cement Builders and Building Materials, Inc.; Holcim Philippines, Inc.; Cemex Philippines, and non-member Eagle Cement Corp.
Aside from data provided by cement companies, DTI relied on data obtained from the Bureau of Customs single administrative document to establish the trend in imports.
DTI said a review of evidence provided showed that the volume of cement imports in absolute terms increased during the POI except in 2022. It grew by 10% in 2020, 17%% in 2021, and 5% in 2023.
During the POI, relative to domestic production, the volume of imports of cement also increased from approximately 30% in 2019 to 35% in 2020, and 36% in 2021 to 41% in 2022. In 2023, the share of imports to domestic production grew further to 47% and 51% in January-June 2024 as domestic production declined.
Moreover, the report said during the POI, the Philippine market showed a declining trend, except in 2021 when it grew by 14%. The Philippine market for cement declined by 5% in 2020, down 11% in 2022, and 6% in 2023.
The domestic industry’s sales revenues also dropped from 2019 to 2023, from P79 billion in 2019 to P64 billion in 2023. Operating profit likewise sank by 11% in 2020, increased by 12% in 2021, then significantly declined by 69% in 2022 and dropped further by 137% in 2023.
DTI noted that the weighted average landed cost of imports is lower than the average selling price of the domestic product, indicating a price undercutting of 24%. Domestic cement manufacturers have been forced to reduce prices by 2% to compete with lower-priced imported cement.
The report said the evidence shows “serious injury to the domestic industry was caused by increased imports.” It noted that the significant increases in the volume of imported cement from 2019 to 2023 preceded the serious injury to the industry in 2023, and that the conditions of competition showed that the market share of local cement producers decreased during the POI from 78% in 2019 to 68% in 2023, as imports in the domestic market displaced locally-produced cement.
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