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Cement, steel price caps proposed after 'Ondoy'


The Trade department will be asking Malacañang to include construction materials and other prime commodities under price controls ordered in the wake of the disaster wrought by tropical storm Ondoy. Cement, steel bars and sheets, and wood are not among the goods automatically slapped with price caps when a state of calamity is declared in an area. Manufacturers said they would comply with the caps if approved but pointed out that they had no plans to hike prices anyway. "We will recommend it immediately. They (construction materials suppliers) better shape up," Trade Undersecretary Zenaida C. Maglaya told reporters at the sidelines of a National Price Coordinating Council meeting on Monday. The price ceilings will depend on week-ago prices. If approved, the controls could stay in place for up to 60 days. Trade Secretary Peter B. Favila added to this later, saying: "Let us recommend it for all prime commodities." Under Republic Act 7581, only basic commodities are placed under price ceilings in times of calamity. These include rice, corn, bread, fresh meat and vegetables, canned fish, root crops, firewood, certain drugs, cooking oil, salt, and detergent. Representatives of supermarket groups present at the council meeting on Monday said they were cooperating with the price control order, but noted that inventory could dwindle in the next few days as deliveries are held up by road problems and lack of trucks. Price ceilings will have to be mandated by Malacañang if it wishes to include prime commodities such as cement, steel sheets, hollow blocks, plywood, nails, electrical supplies, flour, dairy products, and noodles, among others. Sought for comment, cement industry leaders said price hikes were unlikely as supply was sufficient. "We have sufficient inventory and there is no problem," said Eduardo A. Sahagun, Holcim Philippines senior vice-president for sales. Cement plants do not intend to hike prices anyway, said Cement Manufacturers of the Philippines President Ernesto M. Ordoñez. "With or without price ceilings, firms can be charged with profiteering. We aren’t raising prices in this time of need," Mr. Ordoñez said. "We have more than enough cement. Our plants are running just at 56 percent of the 22-million-ton annual capacity," he added. Producers of steel products likewise do not anticipate supply and delivery problems. "I don’t think there will be [a] shortage. There is a high volume of inventory," Steel Angles, Shapes and Section Manufacturers Association of the Philippines director Al S. Tatel said. "Most houses are still standing. [And] even if some tightness occurs, raw materials are expected to come in this month," he added. Supply of steel sheets will also be adequate as floods did not damage roofing, said Rene Roberto G. Garcia, senior vice-president of Steel Corporation of the Philippines. "We don’t expect demand to go up dramatically ... We don’t have any problems supplying roofing requirements but we feel demand [will increase] for other construction materials," Mr. Garcia said in a text message. - Jessica Anne D. Hermosa, BusinessWorld

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