Overflow
FIRST PERSON - Alex Magno (The Philippine Star) - February 12, 2019 - 12:00am

For a while, we had cement flowing out of our ears. The tariff-free importation of the commodity encouraged a horde of traders to import cement in large quantities.

In 2013, the country imported a negligible 3,558 metric tons of cement from neighboring ASEAN countries. By 2017, the volume of imported cement rose to well over three million metric tons. The local market was deluged with cement.

Imports at this volume will surely halt domestic producers. Local cement manufacturers reported a 49 percent decline in earnings. If this trend continues, our cement manufacturing will face extinction.

Local cement manufacturing constitute about one percent of the country’s GDP. It directly employs 42,000. An additional 125,000 jobs are indirectly supported by the industry. As domestic demand grows, the industry projects direct and indirect jobs of 400,000 by 2030.

But domestic manufacturing faces serious challenge from enterprises that merely import their supply. These “pure” importers do not create domestic jobs and contribute little to the domestic product. Their share of the market grew from only 0.02 percent in 2013 to 15 percent in 2017.

Considering all of the above, and holding the domestic cement industry as being of strategic importance to the country, the DTI decided to impose tariffs on cement importation. This is to ensure the survival of domestic manufacturing as well as reduce growing dependence on artificially priced imports.

The move is a courageous and far-sighted one, given that the “pure” importers have become an influential group with the capacity to pressure policymaking. It is, at the most basic, as necessary one.

Without a competitive domestic cement industry, we will be subject to the vagaries of the international market that could push landed costs up or down over a short period. Besides, the massive importation of cement adds to our trade deficit.

Last year, about 75 percent of our cement imports were from Vietnam. Our neighbor, for some reason, has maintained a very low price on its cement imports. Vietnam-sourced cement could sell as low as $48 per ton compared to Thai cement at $65 and Indonesian cement at $102.

There is some discussion in Vietnam about the long-term wisdom of selling its natural resources too cheaply. The Vietnamese government has asked its ministries of construction and finance to come up with solutions to improve the efficiency of natural resource use, energy and labor productivity relating to its cement exports.

This discussion could lead to limiting Vietnam’s cement exports or correcting its pricing to more accurately reflect economic and social costs. The inexplicably cheap Vietnamese cement imported into our economy could, in fact, be a self-limiting phenomenon.

But even if Vietnam will likely increase its cement pricing eventually, we should not wait for our own cement industry to die before we take action.  That would be an act of diffidence.

The decision to impose tariffs is therefore a proactive one in the national interest.

Campaign

The campaign period begins today for those seeking a seat in the Senate or in the House of Representatives as party-list representatives.

For most of us, what this means is there will be better regulation of campaign advertisements over the next few weeks. We will be spared the barrage of ads that went on unregulated the past months.

We have a strange system where electoral authority decided political advertising could only be regulated during the campaign period. The reason for this is that the aspirants indulging in unaudited advertising are technically not yet candidates and therefore could not be subject to spending limits.

As a consequence, some candidates have poured in money during the pre-campaign in a comprehensive effort to build name-recall. All the money spent during the pre-campaign period need not be accounted for in the summary of expenses and contributions candidates are required to submit after elections.

The pre-campaign spending, which will remain forever unreported, has been worthwhile for some aspirants. Some have managed to climb up remarkably in the voter preference rankings during the pre-campaign. The phenomenon underscores the importance of pre-campaign activities in the outcomes – something that should exasperate the Comelec.

Candidates with a nationwide constituency technically have 60 days to muster their voting bases. Midway, however, they will be snowed under by the local campaigns. The pre-campaign, therefore, is a crucial arena. It is also a large loophole that encourages electioneering.

Let us not even talk of the party-list system. It is a fraud that enabled dynasties and leaders of ideological blocs to maintain their unhealthy presence in the legislative branch.

This particular senatorial contest is unique in remarkable ways.

There are no distinct party lines. The fact that Hugpong sa Pagbabago endorses 13 candidates in an election where only 12 seats are at stake underscores the personality-centeredness of this contest. This is a hard-nosed concession to the realities of our electoral politics, not a mere arithmetical failure.

Each candidate is left to his own means to nail a place in the win column. Our political party system may never recover after this exercise.

The obsolescence of the old nationwide party system has long been recognized. The patchwork alliances we now see merely confirm this. In the long term, this will give advantage to politicians who control bailiwicks and eventually exclude players to appeal to voters on the basis of clearly delineated platforms.

Our practice of electoral democracy is shifting irreversibly away from party- and program-based representation toward the dominance of charismatic politics.  Our personality-centered politics has worsened.

No one, I suppose, will say that this particular electoral cycle is wholesome to building our democratic institutions.

2019 MIDTERM ELECTIONS TARIFF-FREE IMPORTATION
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