DTI stops safeguard duty on imported cars, LCVs

Published August 9, 2021, 7:00 AM

by Bernie Cahiles-Magkilat

Trade and Industry Secretary Ramon M. Lopez has signed an order to stop the imposition of safeguard duty on imported completely built up (CBU) passenger cars and imported CBU light commercial vehicles (LCVs).

Lopez  signed the order last Friday, August 6, dismissing the case filed by the Philippine Metalworkers Alliance (PMA) following a final determination by the Tariff Commission of “no surge” in the importation of CBU passenger cars and LCVs reversing the preliminary determination of the DTI. Lopez expects the order to be published within this week.

PMA alleged of import surge in CBU passenger cars and LCVs causing injury to the domestic automotive manufacturing. This prompted the DTI Secretary to issue a provisional safeguard duty of P70,000 per unit of imported CBU passenger cars and P110,000 per unit of imported CBU LCVs to protect the domestic automotive industry and to save jobs.

MB file photo

Once the DTI Secretary’s order has been published, it will forward to the Department of Finance with a request to order the Bureau of Customs to stop imposing the cash bond and return all cash bonds posted by importers on the affected motor vehicles. This process may take anywhere from one to two weeks.

The lifting of the provisional safeguard duty will take effect upon issuance by the BOC of an order to do so.

The Tariff Commission, which conducted the final determination of the merit of the case to impose safeguard duty, ruled that there was no import surge during the period of investigation, 2014-2020.

“Considering the CBU passenger cars and CBU light commercial vehicles were not imported in increased quantities whether absolute or relative to domestic production during the period of investigation, the Commission hereby terminates its formal investigation and recommends that no definitive general safeguard measure be imposed on importations of the CBU passenger cars and CBU light commercial vehicles subject of this investigation,” said the TC decision issued on July 23, 2021.

The TC concluded that the petition Philippine Metaltworkers Alliacne is considered a juridical person belonging the motor vehicles industry pursuant to Section 6 and Rule 6.4 of RA No. 8800 or the Safeguard Measures Act.

The TC further said there are six identified domestic producers/assemblers of passenger cars and LCVs during the period of investigation 2014-2020 and their collective output complid with the domestic industry requirement under Section 4 of RA no. 8800.

TC further said that LCVs produced locally are considered directly completely competitive to imported LCVs classified under the same subheading AHTN 2017 and subheading 8701.21.29 because they are substitutable with the latter in the market by providing consumers with an alternative for satisfying the near needs and tastes for said product.

It added there was no increase in imports of CBU passenger cars and CBU LCVs both in absolute terms and relative to domestic production in the period of investigation. Since it has been established that CBU passenger cars and CBU LCVs were not imported in increase quantities during the period of investigation, the determination of serious injury or threat thereof, causation, and unforeseen developments have become moot and academic, the TC added.