Trade Undersecretary Adrian Cristobal Jr. told the BusinessMirror that his office has just received the copies of the petition of local angle bar makers Cathay Metal Corp., Lunar Steel Corp. and Dragon Asia Rolling Mills Inc. for the expansion of the three-year safeguard measure that was granted by the government in September 2009, and that he will make the endorsement as soon as possible.
“By law, petitions for extension of safeguard measures subsisting are referred by the DTI to the Tariff Commission for evaluation and hearing. Probably, [we will endorse it] by the next week or two,” Cristobal said over the weekend.
In a letter sent earlier to Trade Secretary Gregory Domingo, the local manufacturers said, “The continuation and extension of the safeguard measure is also necessary in order that the positive adjustment to imported competition that the domestic industry has undertaken may continue and be completed.”
The DTI has slapped a safeguard duty of P7,700 per metric ton on steel angle bars in September 2009, and reduced it to P5,133 per metric ton starting April 2010.
Under the law, safeguard measures can be extended for up to 10 years.
Tariff Commission Chairman Edgardo Abon said once the agency has received the endorsement from the DTI, they would conduct the necessary public hearing, investigation and evaluation of documents to find out if the extension is necessary for the industry to survive the imported competition.
“Based on the public hearing and verification, we will submit a recommendation to the DTI. The decision if the safeguard measure will be extended should come out before the original three-year period expires,” Abon said.
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, on the other hand, shrunk to 37,727 MT in 2008, from 106,699 MT in 2005.
In 2009 importation of steel angle bars dropped dramatically to 1,888 metric tons and further to only 60 tons in 2010.
The reprieve allowed the local manufacturers to invest in remedial measures to improve their competitiveness and increased their sales in the process.
Dragon, for instance, is now operating at 40-percent capacity utilization from zero before the safeguard duty was imposed. Cathay increased its capacity utilization to 50 percent from 17.19 percent, and Lunar to 44 percent from 8.4 percent.
The domestic manufacturers said an extension of the safeguard measure would give them the needed boost to continue with their investments that will enhance their competitiveness.
