MANILA, Philippines - Local manufacturers have formally asked the Department of Trade and Industry to extend the imposition of safeguard duty on steel angle bars to the maximum 10 years as allowed by law to ensure viability of the local industry by keeping imports at bay.
In separate letters to DTI Secretary Gregory L. Domingo, angle bar makers Cathay Metal Corp., Lunar Steel Corp. and Dragon Asia Rolling Mills Inc. said the extension of the safeguard measure will remedy the serious injury inflicted by imported steel angle bars on the domestic industry.
"The continuation and extension of the safeguard measure is also necessary in order that the positive adjustment to imported competition that the domestic industry has undertaken may continue and be completed," their letters said.
Also, companies belonging to the Steel Angles, Shapes and Sections Manufacturers Association of the Philippines Inc. (SASSMAPI) are hoping the reduction in the safeguard duties that will be slapped on its third year of implementation will not be higher than 5 percent so the measure will continue to be effective in preventing imported angle bars from flooding the market anew.
The DTI, based on the investigation and report of the Tariff Commission, imposed a safeguard duty of P7,700 per metric ton on steel angle bars in September 2009, and then reduced it to P5,133 per metric ton starting April 2010.
The DTI is expected to release its order setting the amount of the safeguard duty for the third year in May.
Under Sec. 19 of RA 8800 (Safeguard Measure Act), safeguard duties can be slapped for a period of 10 years.
From only 154 metric tons (MT) in 2003, the import volume of steel angle bars went up to 31,847 (MT) in 2008, with an average annual growth rate of 391 percent. The local production, on the other hand, shrunk to 37,727 MT in 2008 from 106,699 MT in 2005.
In 2009, importation of steel angle bars dropped dramatically to 1,888 metric tons and further to only 60 tons in 2010.
Local manufacturers, meanwhile, benefited from the imposition of safeguard duty and the subsequent adjustment plans that they initiated.
Dragon, for instance, is now operating at 40 percent capacity utilization from zero before the safeguard duty was imposed. Cathay increased its capacity utilization to 50 percent from 17.19 percent, and Lunar to 44 percent from 8.4 percent
