The Department of Trade and Industry (DTI) has concurred with the Philippine Tariff Commission's (TC) earlier recommendation to impose tariff duties on imported high-density polyethylene (HDPE) pellets and granules.
Based on the Department Administrative Order (DAO) No. 22-13 of DTI issued September 30, 2022, safeguard duties for imported HDPE resins are imposed for a period of three years. The amount of safeguard duty to be imposed for the first year shall be P1,338/MT, P1,271/MT for the second year and P1,208/MT for the third year. The duty shall be applied to HDPE classified under AHTN 2017 Code 3901.20.00.
In a statement, JG Summit Olefins Corporation (JGSOC), which represents the local petrochemical industry, welcomes the government’s decision for proceeding with the imposition of safeguard duties on HDPE imports, saying this will contribute to the new administration's drive of ensuring the country’s long-term economic recovery.
“The DTI supporting the TC’s recommendation to apply safeguard duties on HDPE imports is an important step to protect the local petrochemical industry against the surge of cheap foreign resins entering the country. This decision shows the support of the government for the local manufacturing industries to ensure long-term viability especially in these challenging times,” said Patrick Henry Go, President and CEO of JGSOC.
HDPE is a strong, multipurpose resin, used in consumer and industrial goods, such as tanks, pipes, industrial packaging, containers, bottles, healthcare articles, toys, tapes, films, and fibers.
In its final report last June 27, 2022, the TC recommended the granting of an ad valorem safeguard duty of 2% on HDPE imports for three years. This, after its investigation has established the presence of a causal link between the “imminent threat of serious injury to the local HDPE industry in the near future” and the recent increase in HDPE imports.
In three years, the TC expects the domestic petrochemical industry will be able to complete the implementation of the efficiency measures indicated in its adjustment plans and thus, enhance its international competitiveness. This includes having adjusted its selling prices to absorb production costs and operating expenses and generate reasonable margins.
Further, the TC also expects the temporary safeguard measure will allow HDPE manufacturing plants to be more environmentally-friendly, cost-efficient, and technologically-advanced.
“With improved price competitiveness, the domestic HDPE industry will remain a reliable partner in the national government’s development agenda,” the TC report said.
“The DTI’s affirmation will certainly help the local petrochemicals manufacturing sector work towards becoming globally competitive and achieve business sustainability. Ultimately, the rest of the economy will benefit from this in the long run,” added Homer Maranan, Executive Director of Association of Petrochemical Manufacturers of the Philippines.