Posted on 18 Jun 2015
The Tariff Commission’s endorsement for the final extension of the definitive safeguard measure on imported steel angle bars has been awaiting approval by the Department of Trade and Industry (DTI).
The Commission had favorably endorsed the imposition of the third and last extension of the punitive duty for almost four months already to continue protecting domestic manufacturers against cheap imports and illicitly traded steel angle bars.
An angle bar, also known as an “L-bracket” or an “angle iron,” is a metal bracket in the form of a right angle. It is made of galvanized steel and often used in masonry or applied to different surfaces through welding or drilling. Angle bars are often utilized to support beams and other platforms, but their usefulness goes beyond their usual role. It can provide additional strength, protect structures from corrosion and even provide additional stability.
Ramon Khu, executive director of Steel Angles, Shapes, and Sectors Manufacturers Association of the Philippines (SASSMAPI), said the positive TC recommendation for another four-year extension has been awaiting signature by DTI Secretary Gregory L. Domingo.
Khu said that the imposition of the safeguard duty has proved to be helpful to the domestic industry which registered an estimated 20 percent increase in production in 2014.
Khu said they need the final extension of this protective measure because the illicit trade or smuggling of steel angle bars has is coming back.
“There have been misdeclaration of steel angle bars, that is why we are hoping for the extension of the safeguard measure and stricter implementation of rules by the Bureau of Customs and the DTI,” he said.
The industry employs as much as 50,000 direct and indirect workers who would be affected if technical smuggling will again proliferate in the domestic market.
Based on its report dated January 28, 2015, the Commission 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 DTI.
In March 2012, the DTI extended 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.
“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.
Termination of the safeguard duty, the Commission said, will make it difficult for the domestic industry to price its products at 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.
The Commission cited serious threat to the local industry given the significant increase in the volume of steel angle bar imports in the last two years.
Without the safeguard measure, the landed cost of imported steel angle bar with value-added tax 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.
