DTI may reimpose tariffs on foreign wheat, cement

Tariffs on imported wheat and cement will likely be reimposed this week, since the government is unlikely to renew orders temporarily allowing their duty-free entry, a Trade official said on Friday. The 0 percent tariff has not dramatically lowered flour and cement prices, as intended, to warrant the extension of Executive Orders 818 and 819, which will lapse on Jan. 12, Trade Undersecretary Zenaida C. Maglaya told reporters on the sidelines of a press briefing. "I dont think we are [renewing the orders for duty-free cement and wheat]. That is what is coming out in discussions," she said. The two orders suspended for six months the 3-percent tariff on cement and wheat obtained from Southeast Asia and the 5 percent levied on those imported elsewhere to deter local makers of cement and flour from raising prices. The orders extended the periods covered by Executive Orders 765 and 766, which had similarly slashed tariffs in the first half of last year. No benefit "When we extended the orders before, we hardly saw an impact [on cement and flour prices]. There was no full benefit from the reduction in tariff revenue," Maglaya said. Tariffs on wheat, used to make flour, will likely be reimposed even as millers have already warned they might raise flour prices this month, she said. "We’ll have to look into world prices of wheat," she added. But millers should not immediately hike prices since they are likely to still have stocks, Maglaya said. Industry groups representing flour millers and cement manufacturers could not be immediately reached for comment. However, their representatives said in earlier consultations with the Department of Trade and Industry that the executive orders should not be renewed. Keeping tariffs on imported cement at 0 percent will make the Philippines a target for dumping, the Cement Manufacturers Association of the Philippines said. Price hike looms The Philippines Association of Flour Millers, meanwhile, said its members no longer needed duty-free wheat, noting that they expect global prices to stabilize this year. But just last week, the millers’ group changed its tune, noting that global wheat prices have been rising due to tight supply. The group said on Friday it would be increasing flour prices by roughly 3 percent to P770-P790 per 25-kilo bag within the month. The tariff on wheat roughly translates to about P21 per bag, based on the price rollback millers made when duties were first lifted in 2009. Cement prices have also been rising to as much as P270 per 40-kilo bag over the P205-P210 suggested retail price, despite the absence of price increases from manufacturers, prompting the Trade department to publish reference prices on Saturday. — Jessica Anne D. Hermosa, BusinessWorld