Demand for — as well as the resulting high prices of — construction materials is said to be an indicator of the state and pace of development in a country.
After all, high demand for cement and other materials needed for the construction of buildings, houses, bridges and other structures is a sign of a robust economy, expressed through rising demand for housing, office space, retail space, leisure areas and other locales for public gatherings and other purposes.
Which is why the price of cement, mentioned in this space earlier, is a matter of public concern. In that previous column, it was mentioned that a newly imposed requirement for an import clearance certificate (ICC) on cement importers could result in an increase in cement prices, slowing the momentum of the government’s much-vaunted “build, build, build” drive and putting economic growth at risk.
One of the main points raised against the new requirement was that while it was going to be imposed on cement importers, local manufacturers-importers would be exempt.
To clarify, Trade Undersecretary Teodoro Pascua says the new regulation was preceded by consultations dating back to 2016, with industry stakeholders, including manufacturers and importers alike.
The new department administrative order, Pascua added, is “heavily considering the protection of the consumers, especially those like you and me, the ordinary ‘small’ consumers.”
Big-time developers, says Pascua, on their own test the cement that they use for their projects. Developers like SM, Ayala Land, Megaworld, D.M. Consunji and the like could very well protect themselves and their clients against possible construction failures by conducting their own tests. “But small-time homeowners and house-builders,” adds
Pascua, “have no way of testing the cement they need and so must rely on the assurances provided by hardware suppliers and by government accreditation.
The only reason the new standards are being imposed, according to the Department of Trade and Industry, is to protect consumers from possible substandard imported cement since lives could be endangered if substandard cement enters the market.
Cement manufacturers-importers, it is explained, are not required to secure an ICC because they have been classified as “low-risk,” therefore likely to ensure product quality since manufacturers of “branded” or recognized cement products would not risk their companies’ reputation with shoddy products.
In contrast, the DTI says, it is possible that some importers may not be able to account for the quality and vouch for the brand of cement they supply.
As for the issue of possible increases of cement prices because of the new regulation, Pascua points out that the prevailing price of cement in the National Capital Region from 2013 to the present has ranged from P218 to P220 per bag. “So I don’t know where the possible price increase to P300 per bag caused by the testing requirement comes from,” adds the undersecretary.
Since June, says Pascua, three civil cases for TROs on the implementation of the new administrative order have been filed by cement importers in different courts in Makati. Two of these cases have been withdrawn or dismissed, so only one case remains pending and is being attended to by the Solicitor General for and on behalf of the DTI.
This then is a question of motivation. Cement importers say they are fighting the administrative order because they fear new requirements would lead to unforeseen costs that would force them to raise prices. On the other hand, the DTI says it needs to impose more stringent regulations against imported cement whose provenance and quality it has no way of checking before the product is sold and used by an unknowing public.
Perhaps, while the issue is still up in the air, the public would do well to leave the matter to the courts, and to the DTI to implement the rules in the meantime. From where I sit, public safety should be a matter of priority, and proper testing and certifying of cement products should be carried out.