The Tariff Commission has ruled that the domestic manufacturers of steel angles are indeed suffering from import surge and has recommended the imposition of a P7,700-per-ton safeguard duty on imported angle bars.

Edgardo Abon, chairman of Tariff Commission, told the BusinessMirror  the Department of Trade and Industry (DTI) now has 15 days to implement the recommendation or make some revisions to it.

“We saw that there is a real surge in importation and there are indications of serious injury on the part of the local manufacturers,” Abon said.

The Steel Angles, Shapes and Section Manufacturers Association of the Philippines (Sassmapi), in filing its petition for safeguard duties, earlier sought at least P14,000 per ton of additional duties so they can compete with the imported steel angles.

However, Abon said the P7,700 safeguard duty was based on the computation of the commission’s technical team on the difference between the landed price of the imported angle bars and the production cost of the local manufacturers in the last four years.

The commission recommended that the safeguard duty be imposed for three years, although the amount will diminish based on the annual review that will be done by the agency on the trading situation and the competitiveness adjustment mechanisms that were committed by the local manufacturers.

Abon said since they made a positive recommendation, the DTI has the power to introduce changes in the specific recommendations or even overturn it completely.

The law bars the DTI from overturning negative recommendations only.

Abon said the DTI can also slash the recommended safeguard duty, impose a tariff rate quota, or quantitative restrictions.

The DTI can also decide when would be the start of the imposition of the safeguard duty.

The DTI, in making a determination whether to sustain the recommendation, will use as gauge the public welfare and condition of the industry, Abon said.

The domestic industry, represented by Cathay Metal Corp., Dragon Asia Rolling Mills Inc.  and Lunar Steel Corp., said from over 10 manufacturers in 2005, the number of local producers of steel angles has now dwindled to seven. Worse, they are now operating at an average of 20- percent capacity utilization.

Also, from only 154 metric tons (MT) in 2003, the import volume of steel angle bars went up to 31,847 (MT) in 2008, with an average annual growth rate of 391 percent. The local production, meanwhile, shrunk to 37,727 MT in 2008 from 106,699 MT in 2005.

“The data speak for itself, that there is really a surge in imports and production of local manufacturers has gone down and this happened because the market share of the domestic manufacturers went down,” Ramon Tan, plant manager of Lunar Steel and executive director of Sassmapi, earlier said.

The DTI earlier imposed a provisional safeguard duty of P1 per ton only.