IMPORTERS of plastics raw materials called on the Tariff Commission (TC) to review its recommendation to impose safeguard duties on high-density polyethylene (HDPE) imports, saying the decision unduly benefits a domestic producer.
The Philippine Plastics Industry Association, Inc. (PPIA), in a statement on Monday, “implored” the commission to “reconsider its position” and asked the Department of Trade and Industry (DTI) “not impose safeguard duties on HDPE resin.”
“To extend protection to benefit a sole producer, at the expense of the downstream manufacturing industry dominated by micro, small, and medium enterprises (MSMEs) and employing hundreds and thousands of Filipinos, increase the cost of packaging materials and plastic products and add to the increasing inflation… will also result in tariff distortion (in which) cheaper imported finished products will continue to proliferate,” it added.
The commission said in a final report dated June 27 that it recommends the imposition of an ad valorem safeguard duty of 2% on imported HDPE pellets and granules for three years.
HDPE resin is used in consumer and industrial packaging.
According to the report, the commission found the “existence of a causal link between the imminent threat of serious injury to the local HDPE industry in the near future and increased imports of HDPE.”
The TC’s investigation on the safeguard measures for HDPE imports began last year following a petition from the petrochemical industry, represented by JG Summit Olefins Corp. The company is the sole domestic producer of HDPE.
“To grant safeguard for a period of three years to benefit a single entity for the imminent occurrence of serious injury despite clear evidence of (the company) posting a healthy net income during the investigation period and embarking on expansion programs is not fair to the downstream industry, (which is) expected to suffer from any decision favoring the request,” the PPIA said.
The commission’s recommendation on HDPE has been forwarded to the DTI.
The implementing rules and regulations of Republic Act 8800 or the Safeguard Measures Act gives the Trade Secretary within 15 calendar days from receipt of the report to rule on the recommendation.
BusinessWorld asked the commission to comment on the PPIA statement but it had not replied at the deadline. — Revin Mikhael D. Ochave