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| Like rice, cement buffeted by woes |
| Tuesday, 03 June 2008 11:25 | ||||||
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“It’s ironic that we used to have the best rice research in the world with the International Rice Research Institute, but now the Philippines is the world’s largest rice importer,” said Rafael de la Torre, chief advocate of the Center for Organizational Studies and Advocacy. Compared to rice, De la Torre said the Philippine cement industry is even more vulnerable to hostile economic forces. The lawyer described as “potentially damaging” the possible position of a government agency that cement should not be included in the 300 tariff lines to be exempted from the zero tariff provision that would take effect next year under the Asean-China Free Trade Agreement. Like in rice, the Philippines pales in comparison to Vietnam in cement production. De la Torre said Vietnam has an annual cement output of close to 39 million metric tons, three times larger than the Philippines’ yearly production of only 13 MMT, yet Vietnam keeps its tariffs at 40 percent. Malaysia also keeps its cement tariff high at 50 percent compared to the Philippines’ very minimal rate of only 5 percent. “They are now considering the total elimination of cement tariff under the ACFTA, seemingly unmindful of its negative impact on such a strategic industry,” De la Torre lamented. China produces more than 1.2 billion tons of cement and clinker yearly. “Exporting even 1 percent of China’s cement production to the Philippines could totally wipe out our own cement industry,” De la Torre said. He warned that elimination of tariff on imported cement as contemplated in the ACFTA will have fatal consequences on the domestic cement industry in particular, and on the national economy in general since other Asian countries have maintained high tariff and non-tariff barriers. Consumers and construction stakeholders argued that the Asian cement market is “characterized by massive excess capacities, and declining demand in some countries. As a result, cement is being exported at marginal costs, causing unfair competition to the local cement industry.”
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