Safeguard duties on GI sheets opposed

MANILA, Philippines - A section of the domestic steel industry has opposed the proposal to impose safeguard duties on imported galvanized iron (GI) and pre-painted galvanized iron (PPGI) sheets due to its inflationary effect on these critical construction materials, especially now that the country is in the midst of reconstruction efforts in areas devastated by disasters.

The Philippine Association of Steelformers Inc. (PASI) said imposing additional levies on imported GI and PPGI sheets will make the government insensitive to the condition of Filipinos, particularly those living in several areas of Mindanao and the Visayas that were ravaged by man-made and natural disasters.

“Supply and prices of roofing materials will be crucial when the government, the private sector and even individual homes will start rebuilding structures like schools, hospitals, commercial and residential buildings and mass housing in the ravaged areas in Zamboanga as a result of the siege by Muslim rebels, areas of the Visayas region caused by the 7.2-magnitude earthquake and several areas in the Visayas and southern part of Luzon due to Typhoon Yolanda,” PASI spokesman Rene Garcia said.

Puyat Steel, one of the players in the industry, filed the petition seeking the imposition of safeguard duties on imported GI and PPGI sheets.

Right now, Garcia said the Philippines is forced to import GI and PPGI because domestic manufacturers can only supply about half of the estimated annual demand of 300,000 metric tons (MT). Demand is expected to considerably increase this year due to the reconstruction efforts.

Garcia said at the current prevailing price of $900 per MT, assuming a 25-percent additional safeguard duty, it would result in an increase of P9,750 to P11,250 per MT in the prices of GI and PPGI sheets in the market, or P84 per eight-foot sheet of GI and P130 per eight-foot sheet of PPGI.

He said local manufacturers of GI and PPGI sheets, including Puyat Steel, need to import because the current combined rated capacity of their plants is not sufficient to supply the requirement of the market.

“Safeguard measures in the form of levies or surcharge penalizes legitimate importers and users of the product in the form of increased costs and consequently increase in domestic prices. It will be insensitive and contrary to public policy and interests,” Garcia added.