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DTI to back House probe on cement price increases

By Ayen Infante

05/13/2008

The Department of Trade and Industry (DTI) will support a plan by the House of Representatives to look into the recent wave of price increases on local cement.

Favila said if there will be a move by Rep. Junie Cua, senior vice chairman of the House committee on trade and industry, to conduct a hearing on the cement industry that would justify a price hike imposed last month, “the DTI will be very supportive of it.”

“We are confident on the objective of the planned hearing,” he said.

“I dont see anything wrong if that would give very good venue to amplify their (cement industry) position why there was such an increase,” Favila added.

Favila made the statement following a statement of Cua on a possible investigation on the reasons of cement makers for imposing a P5 to P8 price increase on every bag of cement.

Cement manufacturers, earlier explained prices of local cement will have to be raised because of the surge in the prices of fuel and other inputs. The DTI was informed of the adjustment in prices. The industry also informed distributors and hardwares of the price increase.

The latest DTI price monitoring held last April 11 showed cement prices ranged from P175 to P180 per bag. In the provinces, however, prices have gone up to as high as P200 per bag.

Cement manufacturers claimed they did not raise prices since August 2006 and even when the local construction industry picked up in June 2007. This time, fuel prices have gone up substantially together with all other inputs including paper bags, it added.

From January to February this year, the industry noted demand increased by up to 2 percent before dipping anew in March.

Sales in March went down by 10 percent as against March 2007 resulting to a negative performance in the first quarter of 4 percent compared to the same period last year.

Cement Manufacturers Association of the Philippines (CMAP) president Ernesto Ordonez earlier explained that the slow demand in March was due to the delayed approval of the government budget that also triggered delays in infrastructure programs. March last year was exceptionally high because it was election year and that largely fueled expenditure spending, he added.