Anti-trust body raises concern on cement safeguard duty

MANILA, Philippines — The Philippine Competition Commission (PCC) has expressed concern on the imposition of a definitive safeguard measure on cement imports as the antitrust body probes allegations of anti-competitive practices in the industry.

As the PCC is undertaking a review of San Miguel Corp.’s (SMC) acquisition of Holcim Philippines Inc. (HPI), the body has asked the parties to provide more information on the deal.

PCC chairman Arsenio Balisacan told reporters yesterday the recent move of the Department of Trade and Industry (DTI) to impose a definitive safeguard measure on cement imports is a concern given the antitrust body’s ongoing investigation on the industry.

“Obviously, it’s a concern because you have an ongoing investigation and there are other government actions that (can) influence the outcome of the investigation. But I am not saying now that is an issue,” he said.

Earlier this week, Trade Secretary Ramon Lopez said the DTI has decided to impose a definitive safeguard duty on cement for three years to address the injury caused by increased imports to the domestic industry.

The safeguard duty on cement would be at P250 per metric ton (MT) or P10 per 40-kilogram (kg) bag for the first year of implementation; P225 per MT or P9 per bag for the second year; and P200 per MT or P8 per bag in the third year.

The definitive safeguard duty would replace the provisional safeguard duty of P210 per MT or P8.40 per bag which is in effect until Sept.10.

In 2017, the PCC started its probe on the cement industry for possible violations of Sections 14 and 15 of the Philippine Competition Act, following a complaint filed by former trade undersecretary and now president of consumer advocacy group Laban Konsyumer Inc. Victorio Mario Dimagiba, stating that the Cement Manufacturers Association of the Philippines, led by its president Ernesto Ordoñez, LaFarge Holcim Philippines Inc. and Republic Cement and Building Materials Inc. violated the provisions of the law by engaging in anti-competitive agreements.

Anti-competitive agreements cited in the complaint include restricting competition as to price or components thereof or other terms of trade, abusing their dominant position by engaging in conduct that substantially prevent, restrict, or lessen competition, imposing barriers to entry, or committing acts that prevent competitors from growing within the market.

On the review of the SMC-HPI transaction, Balisacan said PCC has requested the parties to provide more information.

“Under the law, if the commission is not able to decide on the case within 30 days and the commission needs more information to effectively evaluate the case, the merger, it requires to ask the parties more information and that is the stage where we are right now,” he said.

Last May, the LafargeHolcim Group signed an agreement with SMC for the latter’s acquisition of an 85.7 percent stake in HPI.