The Tariff Commission (TC) has determined that the domestic cement (Type 1 and Type1P) is a “like product” to imported cement (Type 1 and Type 1P) and that cement is being imported into the Philippines in increased quantities, and established the existence of a causal link between imminent threat of serious injury to the local cement industry and increased imports of cement, TC recommended the application of a definitive general safeguard measure at PhP297 per MT or PhP12 per 40kg bag on imported cement to prevent the occurrence of the threat of serious injury. TC further recommended that the definitive safeguard measure be applied for a period of three (3) years, starting from the date that the provisional measures took effect in accordance with Rule 8.7 of the IRRs of RA No. 8800.
Relevant Provision: Section 13 of RA 8800
“Adoption of Definitive Measures. – Upon its positive determination, the Commission shall recommend to the Secretary an appropriate definitive measure, in the form of:
(a) An increase in, or imposition of, any duty on the imported product;
(b) A decrease in or the imposition of a tariff-rate quota (MAV) on the product;
(c) A modification or imposition of any quantitative restriction on the importation of the product into the Philippines;
(d) One or more appropriate adjustment measures, including the provision of trade adjustment assistance;
(e) Any combination of actions described in subparagraphs (a) to (d).
Rule 5.2 , IRR of RA 8800 – Conditions for the Application of General Safeguard Measures
The Secretary when establishing that the application of a safeguard measure will be in the public interest shall take into consideration the following factors; among others:
(ii) the extent to which such imposition will cause a shortage of a product under consideration in the domestic market”.
DTI has taken into account public interest in the decision whether to impose safeguard measures and has considered other factors that will assist the local industry and will benefit the consumers and end users.
Likewise, the safeguard level aims to minimize the impact to prices for buyers and users while addressing the industry injury issue, while still encouraging local manufacturers to continuously pursue efficiencies to be more globally competitive.
DTI is mandated by RA 8800 (The Safeguard Measures Act) to protect domestic industry from serious injury caused by a surge in imports. While DTI is also mandated to protect consumers, there is a need to balance this taking into account other sectors such as investors and industry which provide employment to Filipinos. There is also a need to moderate imports to balance trade. If local manufacturers can adequately supply domestic requirements, they need to be provided a level playing field to enable them to compete with imports. This will allow expansion of the country’s manufacturing base and generate more jobs for Filipinos. Further, users of cement retain their option to choose between the local and imported cement since imports will still be allowed. 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. For these reasons, DTI has determined that it is in the public interest to impose the definitive safeguard measure.
Accordingly, the DTI has reviewed the Commission’s findings and recommendations and has established that the imposition of the definitive general safeguard measure shall be in the public interest.
We are deciding on the imposition of definitive safeguard duty of
P250 per MT or P10 per 40kg bag for the first year of the implementation to encourage and challenge the local cement industries to be globally competitive.
Pursuant to Section 18 of RA 8800, the amount of safeguard duty shall be reduced for the second and third years of the implementation. Thus, it is recommended that the amount of the safeguard duty be reduced to
P9.00 per 40kg bag for the second year and to P8.00 per 40kg bag for the third year. A yearly review shall be conducted to determine the appropriateness of the safeguard duty.