Posted on 03 Aug 2015
The Department of Trade and Industry (DTI) has extended for another four years the safeguard measure against imported steel angle bars from various countries for further protection of the local industry, which is still under threat of cheap imports due to oversupply of steel from China.
In a published order, Trade and Industry Secretary Gregory L. Domingo said the definitive safeguard duty shall be reduced by five percent annually over the next four years. On the first year (March, 2015 to March 2016), the punitive import duty shall be R3,345 per metric ton of imported steel angle bars. The amount of the measure shall be subject to regular review to give DTI the opportunity to modify the amount of the duty if necessary.
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.
In extending the safeguard measure, the DTI said it has considered the commendations made by the Tariff Commission which cited the need of the industry for more time to fully implement its adjustment plan.
“The recommended extension will allow time for the domestic steel angle bar industry to fully implement its adjustment plan to positive adjust to import competition,” the order stated.
While the local industry has started implementing their adjustment plans, the DTI noted that the threat of increased imports remains considering the current over supply of steel in major Asian producers, particularly China.
Foreign manufacturers, apart from China, are also facing depressed prices in their home countries and consider the Philippines as a preferred export destination due to its proximity and established trade relation.
Further, DTI said they also considered the public interest in extending the definitive general safeguard measure.
Earlier, Ramon Khu, executive director of Steel Angles, Shapes, and Sectors Manufacturers Association of the Philippines (SASSMAPI), said the imposition of the safeguard duty has proven 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 is coming back.
“There has 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.
The Commission also said that termination of the safeguard measure 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 R22,000 per MT to R25,000 per MT. The domestic industry’s average selling price ranges from R30,000 per MT to R31,000 per MT, which is barely enough to cover the cost to produce and sell locally.
“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 Tariff Commission stated.
