By Victor V. Saulon, Sub-Editor
THE Philippine Competition Commission (PCC) is monitoring the impact of the safeguard duty imposed on imported cement on the prices of consumer products, its top official said.
“We are, of course, monitoring the development of the sector,” PCC Chairman Arsenio M. Balisacan told reporters on the sidelines of the launch on Thursday of a preliminary manual for competition assessment of regulations in Makati City.
He declined to discuss further the results of its observation, citing an ongoing case in the commission relating on the cement industry.
“It’s true that the safeguards are supposedly addressing some concerns. The agencies involved with that have that authority, have that mandate. So what is necessary is to ensure that when we have policies like that, that it would not undermine the competitive process and it would not result in high prices for consumers,” he said.
“Of course, we have to take care also of our producers, but we [should] also be very mindful of the effects of such policies on consumers and the overall common good, the public interest,” he added.
Mr. Balisacan was reacting to the imposition of a definitive safeguard duty on cement for three years, which the Department of Trade and Industry (DTI) announced on Tuesday.
The DTI said it had “established that the imposition of the definitive general safeguard measure shall be in the public interest.” It imposed a safeguard duty of P250 per metric tons (MT) or P10 per 40-kilogram (kg) bag for the first year of the implementation to encourage and challenge the local cement industries to be globally competitive.
The amount of safeguard duty is to be reduced for the next two years, P9 per 40-kg bag for the second year and to P8 per 40-kg bag for the third year. A yearly review will be conducted to determine the appropriateness of the safeguard duty.
The DTI said the imposition of a safeguard measure is not expected to cause a shortage of cement in the domestic market considering that the cement manufacturers have sufficient capacity to meet domestic demand.
Mr. Balisacan said there is a need to understand where the high prices were coming from, including “poorly informed regulatory controls” that have prevented the entry of players.
“Price control may not be the best instrument,” he said, adding that opening up the market could be another option.
Sought for comment, Isidro A. Consunji, president and chief executive officer of DMCI Holdings, Inc. said in a text message: “I think the amount is not big and probably tolerable though many do not accept the premise that the cement industry needs it.”
Mr. Consunji is a former president of Philippine Constructors Association, Inc., which counts as members engineering, building, trade and specialty contractors, including construction materials and equipment suppliers and allied organizations.
Other private entities with ongoing construction projects did not immediately respond to a request for comment on the impact of the safeguard duty on their businesses.
“Obviously it’s a concern because when you have an ongoing investigation and there are other government actions that influence the outcome of the investigation, that would be an issue, but I’m not saying now that there is an issue,” Mr. Consunji said.
Mr. Balisacan said the ideal process is to undergo a regulatory impact assessment. He added that such exercise has “good scientific basis” to identify the options, the associated costs and benefits, and the best option that benefit the consumers, producers and the domestic economy.
“It’s okay to protect the industry but we have to do it in such a way that overall efficiency and economy is improved, productivity is advanced and the consumer welfare is not sacrificed,” he said.
He said questions should be raised on whether the granting of safeguards and standards are the appropriate tool to address the objective of promoting the viability of domestic companies and their ability to compete in the global market.