MANILA, Philippines — The government will look into the possibility of imposing definitive safeguard measures on imports of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) pellets and granules.
HDPE is a type of polyethylene resin used for grocery bags and trash bags, as well as beverage caps for mineral water, juice, and tea, while LLDPE is used for heavy duty sacks, agricultural films, shopping bags and ice bags.
Trade Secretary Ramon Lopez said based on the submissions of interested parties and pieces of evidence made available in relation to the petition filed by JG Summit Petrochemical Corp. (JGSPC) for safeguard measures on the imports of HDPE and LLDPE, the Department of Trade and Industry “has established the existence of a causal link between increased imports of the products under consideration and serious injury to the domestic industry.”
“The case records will be transmitted to the Tariff Commission for its formal investigation to determine whether there is a need to impose definitive safeguard measures on the products under consideration.”
The DTI conducted an initial probe on the petition filed by the Philippine petrochemicals industry, represented by JGSPC, which claimed higher imports of HDPE and LLDPE are causing injury to the domestic industry.
Based on the DTI’s preliminary findings, Philippine imports of HDPE, which totaled 62,061 metric tons (MT) in 2015 rose to 78,305 MT in 2016, then dropped to 76,469 MT in 2017, went up to 84,270 MT in 2018, and increased further to 107,530 in 2019.
The top four sources of Philippine HDPE imports during the period of investigation are Thailand, Malaysia, Singapore, and Saudi Arabia.
In addition, the share of domestic products in the market declined to 54 percent in 2019 from 63 percent in 2015 as the share of imports significantly increased.
The industry also suffered declines in sales, production, utilization rate, profitability and employment.
Meanwhile, the country’s LLDPE imports also went up from 79,764 MT in 2015 to 83,758 MT in 2016, slid to 79,631 MT in 2017, increased to 110,421 MT in 2018, and 120,543 MT in 2019.
The country’s biggest suppliers of LLDPE imports for the period were Singapore, Thailand, Qatar, and Saudi Arabia.
The share of the domestic product was down to 21 percent in 2019 from 46 percent in 2017, as the share of imports in the domestic market grew.
Decline in sales, utilization rate, and negative earnings before interest and taxes were also seen by the industry.
Under the Safeguard Measures Act, the government may impose higher tariffs on imports as a relief to the domestic industry injured by rising imports.