A 10-year tariff protection on steel angle bars saved an industry generating an average of P6 billion in sales annually.
The Tariff Commission (TC) in a report said following compliance with its adjustment plans, the domestic steel angle bars industry was able to maintain its dominant market position, increase its utilization rates, expand its production and sales volumes to meet the increase in quantities demand, and improve its price competitiveness in 2019 even after the safeguard measure was terminated.
As of March, the number of local manufacturers of steel angle bars doubled to 21 from just 10 in 2009 when the additional duties on imports were slapped.
“ This rise in the number of producers is indicative of the growth prospects of the domestic steel angle bars industry and its ability to compete successfully with imports, and with each other, following termination of the safeguard measure in March 2019,” the TC said.
The report also said while prices of some inputs, particularly billets and fuel, continue to be high, the domestic industry expressed confidence it no longer needs protection from foreign competition.
TC data showed imports continued to decline in 2019 to 157 metric tons (MT) from 732 MT in 2018 while the price gap between imported and locally produced steel angle bars has also narrowed.
From 2017 to 2019, the share of domestic production in the market has reached around 99 percent which was the level before the surge in steel angle bar imports drove domestic share to its lowest level, 42.5 percent in 2007.
The industry has pledged to undertake additional projects that will further improve production efficiencies and lower their costs.
The TC said consumers should begin to see improvements to their welfare, giving them more options from imports now that the duties are lifted.
“If the country would completely rely on imported steel angle bars and allowed the domestic industry to completely disappear, that could mean a loss for the economy of a local industry that generated average annual sales of around P5.8 billion from 2014 to 2019. Add to that the lost wages of hundreds of workers that would have been unemployed and the billions in assets and capital that would have been left unproductive if there were no more local industry,” the Commission said.
But the Commission urged the domestic industry to build its resilience and manage well its response to the 2020 pandemic to sustain its competitiveness and growth and not waste the gains from the imposition of the safeguard measure. – Irma Isip
