Envoy asked to look into undervalued cement imports

The Cement Manufacturers’ Association of the Philippines (CeMAP) has requested Philippine Ambassador to Beijing, PRC Sonia Cataumber-Brady to look into the issue of undervalued cement imports flooding some areas of Mindanao.

“We petition the good Ambassador to bring to the attention of the Government of China the unfair practices in the export of their cement to the Philippines,” CeMAP President Ernesto M. Ordoñez said in a letter to Ambassador Brady.

The Chinese Horse Brand cement which arrived in Davao on June 28, Ordoñez says, is grossly undervalued. Documents gathered by CeMAP show that the declared CIF (cost, insurance and freight) cost of the Chinese cement is $30 per metric ton. The Philippine Shipper’s Bureau, meanwhile, declared the freight of cement from China to the Philippines at $22 per metric ton.

“Deducting the $22 freight costs from the declared CIF of $30 will result in an FOB (Free on Board) of $8 per metric ton. This is way below the prevailing cement export FOB price of $39 to $43 per metric ton which was reported by the Department of Trade and Industry Commercial Attaché in Guangzhou, China,” Ordoñez stressed.

Already, CeMAP has lodged a complaint with the Bureau of Customs concerning this transaction. Yet another undervalued shipment, he says, involves the Chinese-made Conch Brand which arrived in Polloc, Cotabato City on July 2, and in General Santos City on July 4. Papers show that the shipment which came in two batches was transacted at $30 per metric FOB, $3 per metric ton freight, and $0.15 per metric ton insurance, or a total of $33.15 per metric ton CIF.

“The $3 per metric ton freight is obviously wrong since it should have been pegged at $22 per metric ton,” Ordoñez said. If we then subtract the real freight cost from the total CIF cost with insurance, the resulting FOB will be $11.15. This is again far below the $39 to $43 / MT FOB price reported by the DTI Commercial Attaché.

According to Ordoñez, “This gross undervaluation of less than 25 percent of the estimated CIF value implies that the importers are depriving our government of much-needed tax revenues at a time when the country needs resources to fund vital social and economic expenditures.”

Moreover, he says, these undervalued imports which are sold at cheaper prices pose unfair competition to the domestic cement industry which pays billions of pesos in taxes annually. “Worse, it threatens the livelihood of thousands of workers who depend on cement.”

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