The Department of Trade and Industry (DTI) has started an investigation to determine whether safeguard measures on imported ceramic tiles are necessary to protect the domestic industry.

In compliance with the global agreement on safeguards, the DTI informed the Geneva-based World Trade Organization (WTO) that it launched the probe on Feb. 5.

Under WTO rules, a safeguard investigation aims to establish whether increased imports of a product are causing, or are threatening to cause, serious injury to a domestic industry.

As such, a member state of the organization may take safeguard action, such as import restrictions or duties, only if the injury is directly attributable to the product concerned.

In a notice, the DTI said it received a petition from the Ceramic Manufacturers’ Association Inc. (CMAI) for the conduct of a preliminary investigation into the application of safeguard measures on imports of ceramic tiles from various countries.

In its petition, CMAI alleged that increased imports of ceramic tiles have “contributed significantly” to the serious injury of the local industry.

Ceramic tiles are thin slabs made from clay or other inorganic raw materials, generally used as coverings for floors and walls.

Citing its initial evaluation, the DTI said it “found the existence of a prima facie case that will justify the initiation of a preliminary safeguard measures investigation on the importation of ceramic tiles.”

The period of investigation covers 2020 up to the first quarter of 2025.

During this period, CMAI members Mariwasa Siam Ceramics Inc. and Formosa Ceramic Tiles Manufacturing Corp. accounted for the country’s entire domestic output of ceramic tiles.

Based on the DTI’s preliminary report, the local industry reached its peak of over one million metric tons (MT) in 2022, but it began to shrink the following year as imports grew.

“Market share of the domestic industry steadily declined from approximately 30 percent in 2020 to approximately 20 percent in 2024, while imports increased their share over the same period, from almost 70 percent in 2020 to almost 80 percent in 2024,” the DTI said.

Based on data from the first quarter of last year, imported ceramic tiles captured 86 percent of the market, while the domestic industry contributed only 14 percent to total supply.

China was the biggest supplier of ceramic tiles to the Philippines during the investigation period, accounting for 71 percent of the total.

Under Republic Act (RA) No. 8800, or the Safeguard Measures Act, the government may impose safeguard measures to provide relief to domestic industries suffering serious injury as a result of increased imports.

In determining the potential safeguard action, the DTI said it would evaluate whether the imposition of a provisional measure would result in a political or economic crisis.

Likewise, it will assess the extent to which such imposition could cause a shortage of the product under consideration in the domestic market.