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Flawed reasoning

HIDDEN AGENDA - Mary Ann LL. Reyes (The Philippine Star) - March 7, 2021 - 12:00am

Expect prices of pre-painted galvanized sheets to rise significantly very soon.

This is after the Department of Trade and Industry (DTI) issued last Dec. 28, 2020, an order requiring manufacturers of so-called hot-dip metallic coated and pre-painted galvanized coils and sheets, whether local or foreign, to secure with the DTI’s Bureau of Philippine Standards (BPS) a Philippine Standard (PS) safety certification mark license before they can sell, distribute or use their products in the Philippines.

Importers are now required to source their products only from foreign manufacturers holding valid PS licenses only.

The regulation applies only to hot-dip metallic-coated steel coils and sheets intended for roofing and general applications, as well as pre-painted galvanized steel coils and sheets for roofing and general applications. Meanwhile, all other hot-dip metallic-coated and pre-painted galvanized steel coils and sheets intended as raw materials for the manufacture of automotive products, appliances, furniture, and electrical and electronics, and hot-rolled carbon steel strips for pipes and tubes are not covered. However, importers of the latter must apply for a certificate of exemption from the DTI-BPS.

DTI said that the PS quality and/or safety certification mark license is granted to either a local or foreign manufacturer whose factory and products have successfully complied with the requirements of the PNS ISO 9001 and the relevant product standards. However, being a licensee is not enough. The products manufactured by PS licensees must also contain a PS mark before entering the Philippine market.

DTI Secretary Ramon Lopez had previously said that the new rule would improve the competitiveness and quality of locally manufactured products, as well as imported ones, and would level the playing field for iron and steel firms, and ensure the safety and protection of consumers.

While at first glance, the new regulation seems to be well-intended, unfortunately, the consequences are dire. Legitimate importers will now have to require their foreign sources to get a license from the DTI-BPS by having their factories/plants inspected on a regular basis and their products stamped with a PS mark. If our importers are not that significant a market for the foreign manufacturer, why would the latter go through all that hassle and cost? And if they do, who will bear such cost? Our importers will have to buy the products at a higher price, which in turn they will have to pass on to their customers.

Some of the GI sheets are not even being used for roofing purposes. One importer said that he supplies to casket makers and to funeral businesses for cremations. Is it still necessary for the GI sheets to be of high quality and to bear the PS mark for this purpose? I don’t think so.

Some importers also complain that their imported galvanized steel coils, which are already in the country, are being held hostage by the DTI-BPS and cannot be sold or distributed unless they secure an import commodity clearance (ICC) certificate and the corresponding stickers.

With the advent of summer, which is the peak season for construction activities, expect a shortage in supply of GI sheets because, after all, most of what is sold in the market is imported and subject to the new rules.

Legitimate importers of coils who manufacture the GI sheets locally suspect that the new regulation is intended to benefit only one company which caters only to a very small Class A market and half of the Class B market. Meanwhile, half of the Class B market and classes C, D, and E, which comprise the majority of the population and do not require, nor can they afford high-quality GI products, will suffer just because one company making GI coils locally and sells locally manufactured high quality and higher priced sheets wants to ease out importers of GI coils.

Again, since majority of our GI coils and sheets are imported and some GI coils are locally manufactured by one company, the new regulation, as stated by the DTI-BPS, will level the so-called playing field. But, what playing field? Is the DTI referring to prices? So basically, what DTI wants is for imported products, which are more affordable to more than 90 percent of the population, to be priced the same as the higher priced ones, which cater to the minority that can afford, but cannot actually supply the needs of the majority.

One reason cited by the DTI-BPS for the new regulation is that since the Philippines is constantly battered by tropical cyclones, Filipinos need construction materials that can withstand frequent storms. But many of the sheets made from imported GI coils are used by those who probably want, but cannot afford to put high-priced sheets on their roofs. Some of the sheets are used for caskets and for cremation purposes and do not “fly,” as DTI puts it, during typhoons.

Many locally manufactured metallic coated and pre-painted sheets using imported coils are of very good quality, but are sold at cheaper prices. If the DTI really wants to protect the interest of the consumers, why deprive them of a choice?

Unnecessary noise

With the Philippine economy battered by the COVID-19 pandemic, there is a need for all agencies of the government to work together to create an atmosphere where businesses can thrive and be revived and revitalised, and where consumers can once again have the necessary spending power to fuel our economy.

The Bangko Sentral ng Pilipinas (BSP), a few months back, called on Congress to prioritize several pending bills it said would improve the country’s chances of staging an economic recovery. These bills include amendments to the law on secrecy of bank deposits, the Credit Information System Act, and the Agri-Agra Law to encourage banks to lend more to the agriculture and agrarian reform sectors. The BSP also said that the country needs a financial consumer protection law, among others.

Even the President, in last year’s State-of-the Nation Address, wants Congress to prioritize the passage of certain bills, including the proposed Financial Institutions Strategic Transfer Act, the National Housing Development and Rental Housing Subsidy proposals, among others.

At this time when so much needs to be done, Congress should avoid unnecessary noise and debates. The people deserve that much.

One such debate includes accusations being levelled against former House speaker Alan Peter Cayetano and former deputy speaker LRay Villafuerte, alleging that they slashed millions from the pensions and gratuity fund of retired military personnel. Deputy Speaker and Davao City Rep. Isidro Ungab, who made the accusation, however happens to be the chair of the House panel on appropriations when the 2020 national budget was approved. If there was any anomaly that transpired during that time, he had every means to speak out then.

With the 2022 national and local elections just around the corner, demolition jobs are expected to be rampant. Our legislators should keep their eye on the more important things that need to be focused on.

 

 

For comments, e-mail at mareyes@philstarmedia.com

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