House probe looms over reported high prices of cement

MANILA, Philippines - The House of Representatives is poised to investigate a reported upsurge in prices of cement, along with the possibility the price will spiral uncontrollably. An article on the House website said the investigation stemmed from a House resolution filed by Quirino Representative Junie Cua. Cua, who chairs the House committee on appropriations, expressed concern over the constant and steady increase in cement prices since 2002. The resolution asked the House committee on trade and industry to undertake an exhaustive investigation into the reported upsurge on the price of cement. Co-authoring the resolution were Majority Leader Arthur Defensor and Minority Leader Ronaldo Zamora, along with members of the House committee on rules. The investigation aims to compel LaFarge, Holcim and CEMEX, the three leading manufacturers of cement in the country, to submit their "actual cost structures to determine if there is really excessive profiteering." Cua said the three manufacturers control over 80 percent of the market. LaFarge controls 31 to 32 percent of the market; Holcim controls 30 to 31 percent; and CEMEX has a market share of 18 to 20 percent. "LaFarge's, Holcim's and Cemex's control of the local market can be traced from their seemingly unimpeded acquisition of or investment into Filipino cement companies," Cua said. Quoting data from the Bureau of Trade Regulation and Consumer Protection (BTRCP) under the Department of Trade and Industry, Cua said there had been an 84-percent increase in the price of cement from 2002 to 2007. He said the average prevailing price of cement per 40 kg/bag in December 2007 was P175 as compared to only P95 in December 2002. The cost of cement again increased in April this year by P5 to P8 per bag due to the surging prices of fuel and petroleum products. Cua said, however, that the BTRCP data showed that the production cost of cement for a 40 kg/bag ranges only from P69.75 to P80.10. "Per the Board of Investments' Industry Profile on Cement, it appears that there has been under-utilization of cement product since 2002; yet the price of cement is soaring," he said. He said the congressional investigation is also aimed at determining the actual capacity utilization of cement plants to ascertain the real domestic supply situation. - GMANews.TV