[ Malaya.com.ph ] March 16, 2009
At current prices, cement is overpriced, based on a study of the Board of Investments (BOI), according to Trade Secretary Peter B. Favila.
The BOI study suggests that the ideal price of cement should be at P185 per 50-kilogram bag, lower by P40 than current price of P205 in Metro Manila.
The study took note of all the inputs in the production and distribution chain.
Favila said that according to the BOI, at that price level, stakeholders from manufacturers to traders and retailers could still make a reasonable profit.
Although one cement company. Holcim, has forged an agreement with the National Housing Authority for a discounted price of cement products, Favila said he wants to see the price cuts trickle down to ordinary consumers, especially during this time when construction activities pick up.
Historically, cement prices move up in summer and ease during the rainy months, but these have remained steady from last year’s level.
To introduce competition in the hope of bringing down cement prices, government has eliminated the 5 percent tariff on imported cement for six months beginning November.
So far, both the private sector and the government have not made any importation.
Favila said his instruction for the Philippine International Trading Corp. (PITC) to import cement still stands.
"The PITC is ready and it can bring imported cement anytime," Favila said.
Bu Favila declined to give details as to when although he said the instruction is still to get 1
million bags.
The PITC is looking at Japan and Taiwan as possible sources and Favila said it is still negotiating prices.
A source said PITC has done its own study and found that the global cement giants control cement plants in Asia – except those in Taiwan and Japan — and operate like a cartel.
Taiwan and Japan also use the same American standards used in the Philippines.
Two cement importers; Southern Cross Cement Corp. and Taiwan Cement Corp. have both sold their silos in Manila to Lafarge and Cemex, respectively.
The source said when the pump priming activities happen; government would go for low-cost cement.
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