Gov’t urged to keep safeguard duty on steel angle bars

MANILA, Philippines–The Tariff Commission has recommended the extension of the definitive safeguard measure imposed on imported steel angle bars by another four years, to give the local industry more time to implement its adjustment plans and complete efficiency measures.

In a conclusion report dated Jan. 28, the Tariff Commission said it recommended the slapping of duties on imported steel angle bars amounting to P3,345 per metric ton on the first year of implementation. This was calculated by reducing the current safeguard duty of P3,520.73 by 5 percent, consistent with the level of reduction set by the Department of Trade and Industry.

It can be recalled that the DTI issued in March 2012 an order extending the definitive safeguard measure on imported steel angle bars. The first year saw the imposition of P3,901.09 per MT; P3,706.03 per MT on the second year, and P3520.73 on the third year. This measure, unless extended, will expire on March 15, 2015.

“Even with the safeguard measure in place, the threat of increased imports remains. Discontinuing the safeguard measure will likely lead to the influx of imports that could cause serious injury on the domestic industry. With the excess production capacities in China and other Asian countries, the Philippines will continue to be a target export market,” the report stated.

“The termination of the safeguard duty will make it difficult for the domestic industry to price its products at a competitive levels. Without the safeguard measure, the positive gains made by the domestic industry will be negated as the industry still needs time to fully put in place its commitments in the adjustment plan and effectively face import competition,” it added.

Based on the report, the Commission found a significant increase in the volume of steel angle bar imports in the last two years, which posed a serious threat to the local industry.

The landed cost of imported steel angle bar with value-added tax and without safeguard measure, according to the Commission, was about P22,000 per MT to P25,000 per MT. The domestic industry’s average selling price ranges from P30,000 per MT to P31,000 per MT, which is barely enough to cover the cost to produce and sell locally.

“The domestic industry is unable to increase its selling prices to further improve its financial position and invest more to become more competitive because of the low landed cost of imported angle bars. The current worldwide oversupply of steel poses additional serious threat of injury to Philippine angle bar manufacturers. Foreign manufacturers are facing depressed price in their home countries due to oversupply and shall seek to export to get rid of said excess supply,” according to the report.

It added that imports of steel angle bars dropped drastically in 2010 to a low of 60 MT due to the imposition of safeguard measures in 2009. However imports increased dramatically reaching 2,581 MT in the first six months of 2014. This volume had surpassed the total volume imported for the full year 2013, which stood at 2,056 MT. Domestic production in the first six months of 2014 stood at 78,480 MT.

The report also noted that the share of steel angle bar imports to total domestic supply was less than 2 percent from 2010 to 2013. In 2014 however, this share rose to 3.29 percent as the industry failed to meet the rise in demand, resulting in increased imports.–Amy R. Remo

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