RP scraps cement, wheat import tariffs

Posted at 11/19/2008 5:23 PM | Updated as of 11/19/2008 5:23 PM

The Philippines said on Wednesday it had removed import tariffs on wheat and cement for six months to stabilize domestic prices.

The Southeast Asian nation normally imposes a 5 percent duty on cement imports and 3 percent on wheat for food. Imports of feed wheat are slapped a 7 percent tariff.

The import duties on both cement and wheat will be brought down to zero within a month after the executive orders, signed by President Gloria Macapagal Arroyo on Nov. 7 and released on Wednesday, have been published.

The government said the move was meant to secure supply, help lower prices and prevent smuggling, but industry groups warned it will hurt local industries and allow other countries, which are looking to tap more markets amid the global slowdown, to dump their products in the Philippines.

"At a time when everyone's protecting their industries, here we are inviting more products into our territory," Ernesto Ordonez, president of the Cement Manufacturers Association of the Philippines, told Reuters.

"The 5 percent tariff is already very low and to take it out makes the situation worse," Ordonez said, adding other countries in Asia slap much higher duties on cement imports including Vietnam at 40 percent and Thailand at 12 percent.

Local units of Lafarge and Holcim, the world's largest and second-largest cement makers, together produce more than 60 percent of the Philippines' annual cement output of 22 million tons, said Ordonez.

Annual imports are only around 48,000 tons.

The government's decision should also push growers of corn, which is used alternatively with wheat as animal feed, to plant less, said Roger Navarro, head of the industry group Philippine Maize Federation.

"It needs to be reviewed because the times have changed and prices of feed wheat have gone down globally. With this move (to scrap the tariff), the importers are having a field day," he said.

The Philippines resumed buying wheat for feed last month, purchasing about 120,000 tons from the Ukraine, following a drop in global prices, and could buy more next year, according to industry officials.

The country imported 393,000 tons of feed wheat last year, mostly from China, but stopped buying overseas until this month due to high prices.

 


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