Cement importers have denied any significant increase in the volume of cement imports into the country, warning that additional restrictions to the existing “protectionist” measures already in place could only lead to higher prices of this basic construction material.
In response to the “Motu Proprio Initiation of Preliminary Safeguard Measures Investigation on the Importation of Cement” conducted by the Department of Trade and Industry (DTI) on October 28, 2024, cement traders comprising Cohaco Merchandizing & Development Corp. (Cohaco), Fortem Cement Corp. (Fortem), NGC Land Corp. (NGC), Pabaza Import and Export Inc. (Pabaza), and Philcement Corporation (Philcement) explained that the volume of imports has remained steady over the years.
In a position paper addressed to the DTI, the group also urged the agency to discontinue its investigation describing the move as unnecessary and counterproductive.
The preliminary investigation involves cement products classified under the ASEAN Harmonized Tariff Nomenclature (AHTN) Codes 2523.29.90 and 2523.90.00 (the “Subject Products”) from various countries. The Period of Investigation (POI) covers cement imports from 2019 through June 2024.
The cement traders cited data showing that cement imports stood at 5.33 million metric tons (MMT) in 2019. This figure grew by 10.34% in 2020 to 5.882 MMT and by 17.20% to 6.894 MMT in 2021. Importers attributed this increase to the pandemic period, during which local production was curtailed as manufacturers faced difficulties operating due to quarantine restrictions imposed by the government.
“Cement suppliers, particularly importers, were compelled to increase the volume of imports to meet the demand for cement in the country,” the position paper stated.
But as lockdowns and quarantine restrictions eased, cement manufacturers swiftly recovered and imports declined by 2.89% to 6.695 MMT in 2022 before posting a moderate increase of 4.74% to 7.013 MMT in 2023. In 2024, cement imports were projected to have reached 7.361 MMT, representing a modest 4.96% increase. At this rate of increase, traders maintained this does not warrant the imposition of safeguard measures under WTO standards.
While acknowledging the modest increase in cement imports, traders argued that the figures do not accurately reflect the volume of imported cement sold in the Philippine market. In their letter, they emphasized that a portion of the imported cement is used as raw material for the importers’ production of locally manufactured cement. Considering this, importers asserted that the “reported surge in import volumes did not occur.”
Importers emphasized that all imported cement goes through strict quality checks before it can be sold in the Philippines. Before any supplier can export cement to the country, the Department of Trade and Industry – Bureau of Philippine Standards (DTI-BPS) carefully inspects their production process and ensures their cement meets quality standards set out in the Philippine National Standards. Only those that pass are granted a Philippine Standard (PS) License and allowed to be imported.
Every shipment is then required to be tested at least twice—once before it leaves its country of origin and again when it arrives in the Philippines. These tests, conducted by DTI-accredited laboratories, confirm whether the cement meets Philippine standards. Only shipments that pass are issued a Statement of Confirmation from DTI-BPS and allowed for sale. Importers emphasized that these strict non-tariff barriers ensure that all imported cement sold in the Philippine market is of good quality.
The importers also questioned the alleged decline in local cement production amid increasing cement imports. According to the DTI Preliminary Report, cement imports rose from approximately 30% of the market in 2019 to 35% in 2020, 26% in 2021, 41% in 2022, 47% in 2023, and 51% from January to June 2024, as domestic production declined.
Importers countered these claims, noting that members of the Cement Manufacturers Association of the Philippines (CeMAP) and non-CeMAP members have expanded their operations in the country. For instance, Eagle Cement Corp. increased its production capacity by establishing a new manufacturing facility in Bulacan with a capacity of 1.5 million metric tons.
One importer estimated that six new cement plants, including those in Cebu and Davao, are operated by non-CeMAP members, adding to the domestic market’s capacity.
Furthermore, the local cement industry has shifted its focus to the production of Type 1T cement. Given this shift, imported cement has primarily consisted of Type 1 and Type 1P to ensure a steady supply of these products and meet market demand.
“Clearly, the increase in importation is not due to a surge warranting the imposition of safeguard measures. Instead, it is primarily a consequence of reduced domestic production coupled with the necessity to meet ongoing demand,” the importers’ position paper stated.
As such, the cement importers stressed that the increase in importation cannot be used as basis for imposing safeguard measures.
