Philippine government eyes extension of lifting of tariffs on cement

The government of Philippines is now looking at the possibility of extending anew the executive orders (EOs) that lifted temporarily the tariffs on cement and wheat that are due to expire in early January.

Tariff Commission Chairman Edgardo Abon said the government's Committee on Tariff and Related Matters (CTRM) has started the process of reviewing EO 818 (for milling wheat) and EO 819 (for cement), taking into consideration the reconstruction and rehabilitation efforts that are now going on, as well as the condition of the consumers that are still reeling from the effects of the calamity.

"We will look at all the angles and we will check also the supply situation and, of course, the reconstruction and calamity," Abon told the BusinessMirror.

Abon said the Tariff Commission has set a public hearing on December 4 for the two EOs to hear the positions of all the stakeholders.

After that, the commission will transmit its report to the CTRM technical team that will come up with a recommendation to the National Economic and Development Authority (Neda) Board and later to Malaca ang whether to extend the EOs.

EOs 818 and 819 both have a six-month validity period. They were issued to extend earlier EOs that also suspended the tariffs on cement and milling wheat for six months.

The cement tariff was lifted as a way to spur competition in the market through the entry of imported cement and temper the increase in the prices of the commodity then.

Wheat tariffs, meanwhile, was removed temporarily so the government can help the consuming public get affordable bread products in the midst of the crisis.

Abon said the recommendation of the CTRM needs to be submitted to Malaca ang before January.

Ric Pinca, executive director of the Philippine Association of Floor Millers (Pafmil), said the group has yet to formulate its position on the matter. However, he said, imposing the 3-percent tariff anew on milling wheat will result in a P20 increase in the price of locally milled flour per 20-kilogram bag.

"It is the government's decision whether they will give more weight to revenue generation or protecting the consumers from price increases. But they should look after the welfare of the population first considering all the calamities that happened. There is a need to give the population some breathing spell," Pinca said.

He said Pafmil will be waiting for the position of the individual corporate members of the group before it formulates its stand for the Tariff Commission hearing.

From China Cement (2009-11-24)