Gov’t eyes ‘suggested retail price’ on cement
The government is considering to impose a suggested retail price (SRP) on cement, but cement companies don’t want to give out the data needed to come up with a set price.
The Department of Trade and Industry (DTI) is planning to come out with an SRP on the product amid consumer concerns of price increases after the government taxed imported cement.
“We [are] studying whether or not to impose SRP on cement, all things considered,” DTI Undersecretary Ruth Castelo told the Inquirer on Tuesday.
This develops after DTI imposed a provisional safeguard duty on imported cement earlier this month, claiming that the surge in imports have hurt the local industry, department administrative order 19-02 showed.
Safeguard measures are imposed if a domestic industry has been seriously harmed by the surge in imports. The Tariff Commission, an independent and quasi-judicial body, is currently investigating the case in order to verify DTI’s claims.
The tax, which will remain in effect for months, comes in the form of a cash bond worth P210 per metric ton. Some cement importers said they would raise retail prices to offset the additional cost.
The same department order required local manufacturers, most of which are multinational firms, “to maintain SRP while hearing at the Tariff Commission is ongoing.”
However, DTI’s most recent and even past SRP announcements did not include cement, DTI’s online price monitoring system showed.
An Inquirer source, who only spoke on condition of anonymity, said that DTI has never come up with an SRP for cement before because cement manufacturers both here and abroad did not want to share company information.
DTI regularly publishes the SRP of basic goods and prime commodities, drawing the line on how much companies can raise prices on products deemed important for consumers.
Without an SRP, it is difficult to say if a line has been crossed whenever prices have been raised.
It is not clear how DTI intends to approach this situation, given the industry’s reservations. It is also not clear if DTI’s SRP would apply for both imported and locally manufactured cement.
To come up with the SRP, DTI needs to look at the industry players’ costs of labor, raw materials, fuel and logistics, among other factors.
However, there is no fixed cost component that DTI can use to arrive at an SRP, the source said, citing the companies’ reservations against giving out data.
Although some local manufacturers give out details such as their ex-mill price (or the price at the factory without including other costs such as logistics), some information are still not available.
Consumer group Laban Konsyumer Inc. (LKI), which is led by a former DTI official, said in a recent statement that the government should come up with an SRP for cement.
This SRP, said LKI president Victorio Dimagiba, “will eliminate perceptions that retail prices have gone up in anticipation of the safeguard duty now subject of the investigation.”
Dimagiba also said that companies should not pass the added cost to retail prices to spare consumers.