DTI urged to retain current import tariffs on steel inputs

The Federation of Philippine Industries (FPI) is asking the Department of Trade and Industry (DTI) to retain the current tariffs on imported steel inputs to maintain the global competitiveness of the downstream industries.

The FPI said the DTI should not grant tariff protection to the National Steel Corp. (NSC) just to make it attractive for investors to reopen and operate the mothballed steel firm.

In a letter to the DTI, the FPI clarified that it is not against the reopening and operations of the NSC.

What the FPI objects to, is that in pushing for the reopening of NSC, the government would grant tariff protection to the steel firm.

The FPI warns that granting such tariff protection would adversely affect the downstream steel industries and other manufacturing sectors.

The FPI argued that if NSC is allowed to operate under tariff protection, the additional tariff would increase the cost of inputs to the downstream industries, affecting their viability and possibly lead to their closure.

The closure of downstream industries, the FPI said, would eventually affect the NSC because its market, the downstream industries, would shrink.

The Philippine Iron and Steel Institute (PISI) reports that aside from the NSC which used to have 2,500 employees in 1999, there were about 782 other steel manufacturing companies with an estimated direct employment of 62,000 people and a total investment of P62.25 billion.

According to the FPI, those companies have invested in modern equipment and have become competitive.

To ensure the continued viability of existing companies, the PSI proposes that the NSC just be given tax breaks and tax holidays instead of tariff incentive.