Precarious

The domestic cement industry is in a precarious situation.

During the most difficult months of the pandemic, several of our cement plants were shut down along with pretty much the rest of the economy. Over the past few weeks, energy prices have surged. Energy costs account for 70 percent of the final price of cement.

Domestic consumption of cement remained largely flat the past two years because of the pandemic and the recession it induced. Despite that, cement imported from Vietnam rose sharply.

From nearly nothing in 2013, imported Vietnamese cement rose to 2.48 million metric tons in 2016. That volume increased further to 6.46 million metric tons in 2021.

Vietnam has an immense cement production capacity far exceeding its domestic demand for the product. Filipino cement producers claim the Vietnamese are exporting cement at prices much lower than they charge their own consumers. The practice is called “dumping.”

Although importing cheaper Vietnamese cement might seem beneficial to our consumers, dumping injures domestic industry. The injury translates into jobs that could possibly be lost and public revenues government gains from domestic production.

Over the past decade, Filipino investors have poured billions of pesos in building new cement production facilities. Continued dumping of Vietnamese cement could put those investments in jeopardy, adding to the already high unemployment numbers.

Last week, Filipino cement manufacturers presented their case before the Tariff Commission. Basically, they want anti-dumping penalties to be imposed on imported Vietnamese cement.

In 2019, the Tariff Commission imposed safeguard measures against imported cement. The measures were imposed for three years. They are due to expire soon.

While the safeguard measures slowed down cement imports from Thailand, China, Japan, Taiwan and Indonesia, they had little effect on the rising volumes of cement imports from Vietnam. Our cement imports from this country rose faster than the rate of growth of our economy. Today, Vietnamese cement accounts for 91 percent of our imports of the commodity.

Cirilo Pestano, executive director of the Cement Manufacturers Association of the Philippines (CEMAP), argued: “The continuing rise in volume of certain exported Vietnamese cement to the Philippine market at dumped prices puts at risk our domestic industry and adversely impacts our country’s economic recovery efforts.” The dumping of Vietnamese cement undermines the safeguard measures and resulted in a loss of sales volume for the domestic cement manufacturing industry.

The hearings at the Tariff Commission will continue the next few days. Filipino cement producers will have to convince the Commission that while competition is desirable, the cement imported from Vietnam violates fair play and will cause much harm to our economy.

Muscling

Another day and it seems there is yet another controversial contract involving the PCSO.

Last month, the Mandaluyong RTC Branch 212 presided over by Judge Rizalina Capco-Umali decided not to grant the petition for injunction filed by the “unincorporated joint venture” of SmartInfo Philippines, Inc. and China LotSynergy Enterprises Limited. The petition was filed against the PCSO to force the agency to implement the integrated sales agency agreement (ISAA) signed April 12, 2021 by PCSO chair, retired police general Anselmo Simeon Pinili.

Pinili, it appears, negotiated the contract independent of management and it involves the provision of mobile lotto services. Such services, however, are already included in the scope of services provided by the Philippine Lottery System awarded to another consortium.

It seems PCSO general manager Royina Garma and the other career officers in the agency are not comfortable with the separate “mobile lotto” contract. Apart from its redundancy, the PCSO legal department warned against the implementation of the Pinili contract because of several deficiencies. For one, it did not follow due process as a public-private partnership, especially the requirement that it undergo evaluation and approval by the NEDA.

The “organic” officers brought the matter up with Executive Secretary Salvador Medialdea who advised them to seek an opinion from the Office of the Government Corporate Counsel (OGCC). But the OGCC, for its part, said it defers to the decision of the PCSO management and board of directors. This produced some sort of stalemate between Pinili and the PCSO management.

Meanwhile, time is running out for the political appointees at the PCSO. A new administration is coming in, very likely with their nominees for the agency. This could be the reason why the “unincorporated joint venture” is in a hurry to get a court order for the PCSO to execute the ISAA involving a mobile lotto project.

Unfortunately for the “unincorporated joint venture,” Judge Capco-Umali, after declining to issue an injunction against the PCSO, informed the parties she would be on extended leave of absence. It is expected that the petitioners SmartInfo-China LotSynergy could seek to transfer the case to the executive judge of the Mandaluyong RTC.

However, the Supreme Court had advised the Mandaluyong RTC against the hasty issuance of TROs on PCSO cases. The judicial intervention the petitioners are hoping for to muscle their “contract” into force might not happen.

From the looks of it, the career officers of the PCSO will win this standoff. They have time on their side. They do not want a questionable contract awarded to parties previously rejected in other bids to mar their own retirement plans.

This is, after all, a case of political appointees forcing contracts on reluctant career officers who are understandably inclined to stay away from legal controversies. In this case, it seems the unwanted contract has been successfully shelved.

It is never easy to bamboozle civil servants bent on doing what is right.