The Philippine Plastics Industry Association (PPIA) has opposed a petition by JG Summit Petrochemical Corp. (JGSPC) for the imposition of P15,000 per ton on imported resins saying this would lead to the demise of thousands of small businesses in the downstream end of the sector.
PPIA incoming president Danny Ngo in a letter to Trade Secretary Ramon Lopez dated Sept. 14, 2020 said the safeguard duty being sought for high-density polyethylene (HDPE) and linear low-density polyethylene (LLDPE) will only benefit one company, JGSPC, since NPC Alliance has not been in operation since 2016.
“Granting the request for a safeguard duty that will benefit a large conglomerate at the expense and demise of thousands of small businesses does not make good policy sense ,” Ngo said.
PPIA said inconsistent supply and JGSPC’s inability to supply the domestic PE market due to Cracker shutdowns and PE plant issues are the main causes of the “alleged” import surge, it added
The group the claim of a 400-percent increase in imports of midstream products is erroneous and needs to be verified with the Philippine Statistics Authority and the Bureau of Customs.
PPIA also said the current 320,000 MT capacity of JGSPC is not enough to fill the demand of the local downstream industry and import is needed to fill the gap.
Supply shortage is also aggravated by frequent stoppage of JGSPC’s production.
PPIA said any amount of safeguard duty will result to tariff distortion and put the downstream plastic manufacturing and will result to closures and loss of jobs.
A 30-percent tariff imposed on the raw materials will translate to a 15 to 20 percent cost for packaging material and finished goods.
The imposition of safeguards also runs contrary to the Go Lokal and Buy Pinoy programs as cheaper plastic finished products and products packaged in plastics with a zero duty in Asean will flood the market.