The Department of Trade and Industry (DTI) has stood its ground stating it does not need the concurrence from the Tariff Commission (TC) to adjust a safeguard duty rate on a particular import that has been causing injury or serious threat to a domestic industry.
This was stated by Bureau of Import Services (BIS) Director Luis Catibayan when asked on the different stand by the TC over a decision by DTI Secretary Ramon M. Lopez to adjust the safeguard duty on the second year of the three-year definitive safeguard measure on imported cement.
Catibayan stressed that it is the “discretion of the DTI Secretary” and that the “DTI Secretary has the power to determine” the safeguard duty rate.
On the second year of the three-year cement safeguard measure, Lopez amended his original DAO and issued Department Administrative Order (DAO) No. 20-08 series of 2020, adjusting the duty rate to P9.80 instead of the P9 per definitive duty rate on the second year as ordered by Lopez in his original order (DAO No. 19-13).
Although higher than the P9 per bag definitive duty in the original decision for the second year, Catibayan stressed that the P9.80 per bag duty is still lower than the P10 rate that was imposed on the first year of the safeguard measure.
But TC Commissioner Ernesto L. Albano said he was not aware of the DTI order, although TC Commissioner Chairman Marilou P. Mendoza acknowledged the existence of the DTI order. Cement importers also claimed that the BOC is already collecting the new duty rate and they are now paying the new rate.
According to sources privy to the public hearing, Albano noted of the schedule of the definitive safeguard and stressed that by law the duty rate should be going down. He said that DTI cannot raise the duty higher (P9.80 per 40 kilogram bag) from the earlier approved rate (P9.00).
“The DTI cannot do that, the schedule has been set that’s the whole point because the industry should improve so the duty should go down,” Albano said. During the three year implementation period, cement companies are expected to make adjustments and be able to compete against imports once the safeguard measure expires.
Catibayan said that the P9.80 per 40-kilogram duty rate on the second year was also in recognition of the data presented by the Cement Manufacturers Association of the Philippines (CeMAP) for adjustment in duty because the P10 safeguard duty was not effective in deterring the inflow of imported cement.
“We cannot increase the duty rate on the first year because the WTO requirement is to progressively liberalize. So, we adjusted to P9.80, but it is the secretary’s discretion.”
In imposing a higher safeguard duty, the DTI cited the petition by CeMAP, which pleaded to maintain the P10 duty for the second year if not raise it by P2 or P12 per 40-kilogram bag.
CeMAP stated that while the implementation of the safeguard measure had slowed down cement arrivals and has helped the industry to level the playing field during the second half of 2019, the group of cement manufacturers also observed that cement imports seemed to be bouncing back in the first half of 2020.