The Department of Trade and Industry (DTI) has come to the aid of another domestic industry being overrun by imports.
In an order dated August 1 but published on the DTI website on August 8, Trade Secretary Cristina Roque ordered the imposition of a provisional safeguard duty on imported corrugating medium after preliminary investigation established a causal link between increased imports of the product and serious injury to the domestic industry.
The order slaps an additional duty of P3,438 per metric ton (mt) on corrugating medium while the case is under formal investigation by the Tariff Commission.
The DTI was acting on the petition of the Pulp and Paper Manufacturers Association of the Philippines and two of its members, United Pulp and Paper Co. Inc. and Bataan 2020 Inc., which produce corrugating medium.
Used in packaging, corrugating medium is the fluted portion of the corrugated board placed in the middle of two liner boards to provide stacking strength and impact protection.
The period of investigation covered imports of corrugating medium from 2019 to 2023 and was updated until 2024.
The Department, acting under Section 7 of RA 8800, or the “Safeguard Measures Act,” and based on evidence and submissions from interested parties, found that the increased volume of imports, in absolute terms and relative to domestic production, substantially impaired the operations of the local industry, the order said.
Based on DTI’s preliminary findings report, imports surged 28 percent in 2024 to 127,874 mt from 99,671 mt in 2023. In 2019, imports stood at 74,974 and gradually increased over time. Japan accounted for 54 percent of total imports in 2024 at 69,713 mt followed by the People’s Republic of China, 32.55 percent at 41,624 mt.
The DTI order cited Section 8 of RA 8800, which allows it to impose provisional duty “in critical circumstances where a delay would cause damage that would be difficult to repair, and pursuant to a preliminary determination that increased imports are the substantial cause of serious injury to the domestic industry.”
The provisional safeguard measure will be imposed in the form of a cash bond for a period of 200 days from the Bureau of Customs’ issuance of the relevant customs order.
The order said consumers of corrugating medium will retain their option to choose between the local and the imported product.
The safeguard measure will only be temporary and is not expected to cause shortage in the domestic market, it added.
The DTI report said according to the domestic industry, the sales volume in 2019, the start of the period of investigation, was in line with growth demand. However, demand drastically declined in 2020 due to the shutdown of some businesses, leading to increased unemployment, thereby greatly affecting consumer spending.
The report said in 2020, sales volume fell 18.1 percent to 81 mt from 100 mt in 2023. Sales value fell 23 percent to P77 million from P100 million in 2019.
By 2023, the report said, sales volume dropped 1.86 percent to 100 mt from 101 mt in 2022 while sales value fell 11.67 percent to P123 million from P139 million in 2022.
Last year, the industry recovered, with sales volume up 54 percent to 154 mt and value rising 28 percent to P157 million.
One other industry plagued by imports is cement, which is pushing for a definitive safeguard duty when the current provisional duty of P400 per mt, or P16 per 40-kilogram bag, lapses this month.
The Cement Manufacturers Association of the Philippines, at the end of the Tariff Commission hearing last month, said despite having expanded their total production capacity to 51 million mt, current utilization stands at 53 percent due to imports.
Last week, Malacanang announced that President Ferdinand Marcos Jr. has ordered a 60-day suspension of all rice imports beginning September 1, a move aimed at supporting local palay prices and giving farmers some breathing space before the harvest.
