Cement Traders Warn Against Import Restrictions
A group of cement traders has raised alarms over the potential imposition of import restrictions, warning that such measures could significantly hike prices and impact the construction industry. In a position paper submitted over the weekend to the Department of Trade and Industry (DTI), the traders argued that the existing volume of cement imports does not warrant safeguard measures and that further restrictions would only exacerbate the situation.
The DTI initiated an investigation on October 28, 2024, to examine whether the rise in cement imports is damaging the local industry and whether safeguard measures are necessary. The investigation reviewed import data spanning from 2019 to June 2024, focusing on the balance between domestic production and foreign imports. The group of traders, which includes prominent firms such as Cohaco Merchandizing & Development Corp., Fortem Cement Corp., NGC Land Corp., Pabaza Import and Export Inc., and Philcement Corp., expressed that the investigation was unnecessary and counterproductive. They attributed the surge in cement imports to the disruptions caused by the COVID-19 pandemic, which severely reduced local production as plants were forced to shut down or operate below capacity due to quarantine restrictions.
During the height of the pandemic, cement suppliers, particularly importers, had to increase the volume of imports to meet the demand for cement. However, as the economy began to recover and quarantine restrictions eased, imports fell by 2.89% to 6.695 million metric tons (MMT) in 2022. In contrast, foreign shipments rose by 4.74% to 7.013 MMT in 2023, with estimates predicting a further increase of 4.96% in 2024. Despite this increase, the traders believe the rise in imports does not justify the imposition of safeguard measures under World Trade Organization (WTO) standards. They argued that the figures do not accurately reflect the true volume of imported cement being sold in the Philippine market. Furthermore, a portion of imported cement is used as raw material for local production, and all cement shipments undergo rigorous quality control checks to ensure they meet industry standards.
The traders pointed out that while the share of cement imports in the market has increased, this is not solely due to a surge in foreign shipments. They noted that local industry expansions, including capacity increases by major producers such as Eagle Cement Corp. and non-CeMAP (Cement Manufacturers Association of the Philippines) members opening new plants, also contributed to the changing dynamics. For instance, Eagle Cement expanded its Bulacan facility by adding 1.5 MMT of production capacity, while new cement plants were established in regions like Cebu and Davao. The traders emphasized that the rise in imports was primarily driven by reduced domestic production, which necessitated supplementary imports to meet ongoing demand. In light of these factors, the traders maintained that there is no immediate need for safeguard measures, stressing that cement imports have been integral to meeting the growing demand in the construction sector. Instead of imposing restrictions, they advocated for solutions that would foster both local production and the necessary imports to ensure the stability of the market and avoid price hikes that would affect the broader economy.
