TC starts investigation on LPG steel cylinder safeguards

MANILA, Philippines — The Tariff Commission (TC) has started its investigation on the merits of imposing definitive safeguard measures against liquefied petroleum gas (LPG) steel cylinders from various countries.

In a notice posted on its website yesterday, the TC said it has commenced the investigation after receiving a referral from the Secretary of Trade and Industry, as well as the complete case records.

As part of its investigation, the TC is set to conduct a preliminary conference on Friday where parties, especially those on record in the preliminary investigation of the Department of Trade and Industry (DTI) will be required to appear.

“Matters for discussion include the timelines, nature of investigation, appearance of counsel and parties, number of witnesses, notification, accessibility of the documents and public file, confidentiality of documents, submission of position paper/s and memoranda, conduct of inspection and verification of data, schedules of public hearings and other activities, and other topics that may aid the prompt disposition of the case,” the TC said.

Based on Department Administrative Order 23-04 signed by Trade Secretary Alfredo Pascual, the DTI found after preliminary investigation that there is a causal link between the increased imports of LPG steel cylinders and serious injury to the domestic industry.

“The increased volume of imports, both in absolute terms and relative to domestic production, was found to be the substantial cause of the overall impairment in the local industry,” the DTI said.

The DTI conducted the investigation after receiving a petition from Ferrotech Steel Corp. on the matter. The period of investigation covered imports from 2017 to 2021.

The DTI said the case records of its investigation will be transmitted to the TC for the conduct of the formal investigation to determine if there is a need to impose a definitive safeguard measure.

It said that a provisional safeguard measure in the form of a cash bond worth P2.18 per kilogram on imported LPG steel cylinders shall be imposed while the case is under formal investigation by the TC for a period of 200 days from the date of issuance by the Bureau of Customs of an order.

In line with this, the DTI provided a list of countries that are exempted from the provisional safeguard.

According to the DTI, the imposition of the provisional safeguard measures shall be in the public interest.

“With the commitment of the domestic industry to upgrade its facilities, and improve its production efficiency, consumers will have a better and wider range of products to choose from at competitive prices,” the DTI said.

While the DTI is mandated to protect consumers, it stressed however, that there is a need to balance this with the other sectors, such as the investors and industries which provide employment to Filipinos.

“There is also a need to moderate imports to balance trade. If local manufacturers can adequately supply domestic requirements, they need to be provided a level playing field to enable them to compete with imports. This will allow the expansion of the industry’s manufacturing base and sales which will generate more jobs for Filipinos and allow the continuity of employment for the existing employees of the industry,” the DTI said.

It stressed that users of LPG steel cylinders would retain their option to choose between the local and imported LPG steel cylinder since imports would still be allowed.

The DTI explained that the imposition of the safeguard measure would only be temporary and is not expected to cause shortage of LPG steel cylinder in the domestic market considering that the LPG steel cylinder manufacturers have sufficient capacity to meet the domestic demand.

Based on the DTI’s report, imports of LPG steel cylinders totaled to 13,293 metric tons (MT) in 2017 and declined by three percent to 12,88 MT in 2018.

In the following year, the rate of increase grew by 24 percent to 15,942 MT and further increased by 45 percent in 2020 to 23,053 MT.

In 2021, imports decreased by 13 percent, but were still higher than the pre-surge level at 19,990 MT.

Under Republic Act 8800 or the Safeguard Measures Act, safeguard measures or higher tariff on imports may be imposed to help the domestic industry hurt by a surge in imports of like products.