Cement Case

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La Salle University
Graduate Business Program

Title of the Case: Why Cement Prices Remain High Despite Zero Tariffs

In Partial Fulfillment of the Requirement in
Economics Class
8:30 am – 4:30 pm (Sunday)

Presented to
Mr. Rudyrick L. Tabalon

By:
Roland B. Gripaldo

Feb. 2, 2014
Date Submitted

I. Statement of the Problem

Why Cement Prices Remain High Despite Zero Tariffs?

II. Relevant Case Facts and Analysis (SWOT Analysis)

Strength
none
Weakness
Cement prices continue to increase.
Demand for cement is inelastic.
Firms can collectively exert market power.
Competition is limited.
Even at zero tariffs, traders do find the business of importing cement too risky and costly. Opportunity
To attract traders and have imported cements in the Philippines to have a fair competition which leads cement prices to drop. Threats
No low will be approved regarding fair competition, and cartel behavior is not directly treated as competition issue and not penalized.

III. Alternative Courses of Action

The DTI’s plan of bringing in cement through the Philippine International Trading Corporation should be a feasible solution in order to gain imported cements. DTI should deal with cartels as a competition issue and penalize anticompetitive behavior. The Philippines needs a strong competition laws like other countries that treated cartels roughly and illegal.

IV. Analysis of Alternative Course of Action

DIT’s plan must be feasible
DTI must deal with cartels and penalize anticompetitive behavior. Laws should be made again and approved regarding fair trade competition and other strong competition laws.

V. Conclusion

Cartel behavior was not addressed as it should be and it is against public interest and is highly distortive of economic efficiency. Removing import restrictions and eliminating tariffs are not enough to ensure competition because incentives are...
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