Porcelain tiles excluded from additional duty

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    The Department of Trade and Industry (DTI) has excluded a certain type of tiles from the provisional safeguard measure it earlier imposed.

    Napoleon Co of the Philippine Ceramic Products Importers’ Association (PCPIA) said DTI Secretary Ramon Lopez in Department Order 19-11 dated July 3, 2019 had amended its May 7, 2019 order slapping a provisional safeguard duty in the form of a cash bond of P3 per kilogram on ceramic floor and wall tiles.

    Co said the amendment arose from the petition of the PCPIA to explicitly exclude porcelain tiles or tiles with water absorption of less than 0.5 percent from the provisional safeguard duty since these are not produced locally.

    To effect the exemption in the amendment, the Bureau of Customs issued Customs Memorandum Order 42-2019 on Aug. 8, 2019 excluding these types of tiles falling under AHTN Codes 6907.2123, 6907.2124, 6907.2193 and 6907.2194 .

    Co said the DTI’s decision will ensure stable prices of porcelain tiles typically used for large buildings and other commercial structures.

    Porcelain tiles are more sturdy and higher in price versus ceramic tiles used for homes.
    Co said the average price of porcelain tiles is about $5 to $6 per square meter compared to $2 for ceramic.

    About 50 percent of all porcelain tiles in the Philippines are imported from China, 30 percent from Vietnam, Thailand, Malaysia and Indonesia. High-end porcelain tiles come from Europe like Spain and Italy.

    He said the provisional safeguard duty would be implemented as “the DTI, acting under Section 7 of RA (Republic Act) 8800, the Safeguard Measures Act, found after preliminary determination that increased imports of ceramic floor and wall tiles have caused serious injury to the domestic industry.”

    The Safeguard Measures Act allows the imposition of safeguard measures or higher duties on imported goods  if there is an increase in imports of a certain commodity and if this has caused injury to the industry.

    DTI’s preliminary investigation showed the volume of imports of ceramic floor and wall tiles increased in absolute terms from 2013 to 2016.

    It said the domestic industry has suffered serious injury caused by increased imports with its market share falling to 15 percent in 2017 and in 2018, from 96 percent in 2013.
    Earnings before interest and tax of the domestic industry also showed declining trend of 71 percent in 2014 and 203 percent in 2015.