The Tariff Commission has found that the testliner board packaging industry in the Philippines is now on the road to recovery, saying the measures it undertook to improve production efficiencies and increase output during the 10-year imposition of a safeguard measure effectively enhanced its competitive position.
“While recent market developments have been unfavorable, i.e., the lingering economic impact of the COVID-19 pandemic and weak global demand for corrugated packaging, the industry is showing strong signs of recovery,” a report of the TC dated March 19, 2025 and signed by TC chair Marilou Mendoza and commissioners Ernesto Albano and Marissa Paderon, said.
During the decade-long safeguard measure imposed on the testliner board industry starting 2010, a general safeguard duty was imposed on imported testliner boards from various countries, on the recommendation of the Tariff Commission, to save the domestic industry from huge losses caused by increased imports.
Testliner board or recycled liner board is one of the raw materials used to produce corrugated board structures. Testliner board is made from 100 percent recycled paper and serves as the inner and outer lining of packaging board structures.
The report, published on the TC website, contains the evaluation of the adjustment plan of the industry following the expiration of the safeguard measure in 2021.
The report said the number of local manufacturers of testliner boards has increased from seven in 2010, the year the safeguard measure was first imposed, to eight in 2012, with the entry of MultiPly Paper Ventures Inc.
“The emergence of a new player in the testliner board manufacturing sector indicates that the market remains attractive to new entrants. This further suggests that locally produced testliner boards can be competitive with imports following the termination of the safeguard measure, and ensures the availability of local supply,” the report added.
The report said the packaging firm United Pulp and Paper Company Inc. (UPPC), a subsidiary of SCG Packaging Public Co., Ltd. in Thailand, and which represented the testliner board industry in the petition, introduced new production lines and has committed to establish additional baling stations in strategic locations nationwide each year, to reduce reliance on imported raw materials.
“The increase in the (number of) domestic producers of subject article since 2012 is indicative of the industry’s growth prospects. More importantly, there is also an assurance of continuing availability of local testliner boards for local producers of containerboard, which use testliner boards as inputs, reducing their reliance on imports and strengthening the local supply chain,” the Commission said.
The report said between 2021 and 2024 when the safeguard duty was no longer in place, the measures the domestic industry implemented helped it offer highly competitive prices and remain the dominant player in the market.
The TC cited most recent data that showed the industry is strengthening its market position. In the first three quarters of 2024, the industry recorded a market share of 67 percent, an uptick of 22 percent compared to its share in the first three quarters of 2023 of 55 percent.
“That the domestic industry remains the dominant player in the market is indicative of the effectiveness of the efficiency measures it undertook to increase its competitiveness against imports,” the report added.
The TC further noted that the efficiency measures it implemented helped the industry strengthen its market position, increase sales and production, raise its capacity utilization, manage its manufacturing costs, enhance labor productivity, and boost its price competitiveness vis-à-vis imports.
Without disclosing the absolute figures, the TC said that for the first three quarters of 2024, production volumes were higher than the level in the same period in 2023 by a substantial 23 percent but the absolute figures were not made public.
Total sales levels were 30 percent higher in January to September 2024 compared to the same period in 2023, it said.
From 2017 to 2023, demand for testliner boards grew by 2 percent annually on the average.
Over this entire period, the domestic industry was the dominant player, with its market share peaking at 80 percent in 2017, when the safeguard duty was still in effect, the report said.
From January to September 2024, production volume reached an equivalent of 97 percent of 2023 production for the same period resulting in improved utilization rate from 49 percent to 60 percent.
“This is indicative of the effectiveness of industry measures to enhance import competitiveness through increased production efficiencies,” the TC said.
