Solon urges Senate to protect local industries

Party-list Rep. Leonardo Montemayor asked the Senate yesterday to immediately act on a bill that seeks to protect local industries, such as chicken and steel, from import surges.

The House has already approved House Bill no. 7613 or the Safeguard Measures Act, which was authored by Montemayor, Negros Oriental Rep. Herminio Teves, and Quezon Rep. Marcial Punzalan.

Under HB no. 7613, the Secretary of Agriculture in the case of agricultural products and the Secretary of Trade for non-agricultural items shall increase tariffs or impose a temporary ban on foreign commodities entering the country at volumes that are seriously injuring or threatening to seriously injure local industries.

The Senate has yet to act on its own version of the safeguard measures bill.

According to Montemayor, sectors that will benefit from the early enactment of the bill are the poultry and steel sectors. The poultry industry has already warned against its imminent collapse due to the unabated arrival of leg quarters and other chicken parts at prices way below domestic production cost.

"Chicken cuts are coming in at such low prices that even with the application of higher or out-quota tariffs, they are still priced lower than their local counterparts," Montemayor said, adding that the problem is compounded by outright smuggling and sale of duty-free chicken by duty-free shops.

HB 7613 mandates the imposition of a provisional import ban of up to 200 days and/or tariff increases if the volume of imported products has risen by at least 10 percent of the average yearly total of imports over the 36 immediately preceding months or the share of such imported products in the local market grew by at least five percent of the average annual total domestic sales over the 36 immediately past months.

Under the bill, 'serious injury' would be manifested by 'significant idling of productive facilities in the domestic industry, the inability of a significant number of firms to carry out domestic production operations at a reasonable profit level, and significant underemployment within the domestic industry.'

'Threat of serious injury,' on the one hand, would be indicated by 'a decline in sales or market share, a higher and growing inventory, and a downward trend in production, profits, wages, productivity, or employment (or increasing underemployment).