Tariff body proposes extension of safeguards on testliner boards

MANILA, Philippines - The Tariff Commission is proposing a three-year extension of the safeguard measure imposed on imported testliner boards set to expire this month to allow local producers to compete with imports.

“The Commission recommends the extension of the imposition of the safeguard measure by another three years,” it said in a report posted on its website.

The recommendation was made following public hearings conducted for petition filed by the Philippine Paper Manufacturers Association, Inc. in November last year seeking for the extension of the safeguard measure on the importation of testliner boards beyond this month.

Testliner boards, usually made of recycled paper, are used to produce corrugated boxes for the packaging of consumer products.

In July 2011, the Department of Trade and Industry (DTI) introduced the safeguard measure on testliner boards to help local players adjust to competition from imports.

On the first year of implementation of the safeguard measure, the government imposed a duty of P1,342.00 per metric ton (MT) on imported testliner boards.

The duty dropped to P1,274.90 per MT the following year and was cut further to P1,211.15 per MT on the third year of implementation.

The safeguard measure will be in effect until June 14.

Under RA 8800 or the Safeguard Measures Act, safeguard measures are permitted to provide relief to domestic industries threatened by an increase in imports of directly competitive products.

With the proposal to extend the imposition of the safeguard measure for another three years, the Tariff Commission said it is recommending a safeguard duty of P1,150.60 per MT for the first year of implementation. This represents another five percent reduction in the current safeguard duty of P1,211.15 per MT following the DTI’s formula.

“The recommended extension will allow time for the domestic testliner board industry to fully implement its adjustment plan to positively adjust to import competition,” the Commission said.

It noted that the extension of the safeguard measure is necessary given the elimination of tariff rates in various free trade agreements and expected oversupply of testliner boards as producers in other countries implement expansion plans.

Data from the Tariff Commission showed that the volume of imported testliner boards went up by 15 percent to 6,909 MT last year from the 6,015 MT in 2011 as a result of lower-priced imports, particularly from Saudi Arabia, which accounted for 54 percent of total Philippine purchases of testliner boards from overseas.

For the first quarter, the volume of testliner board imports surged by 169 percent to 2,306 MT from 858 MT in the same period last year.

Given the cheaper prices from the source countries as well as the reduced definitive safeguard duty for this year, the Tariff Commission said the total volume of imports this year may either match or surpass the 2012 level.

Tariff Commission chairman Edgardo Abon said earlier that while they are submitting a recommendation on the petition, it will be up to the DTI to decide on the matter.