DTI set to decide on imposition of safeguard duties on auto imports

MANILA, Philippines — The Department of Trade and Industry (DTI)-Bureau of Import Services (BIS) is aiming to finish this month its evaluation of the petition filed by a labor group to impose safeguard measures on automobiles.

“We’re targeting to complete the evaluation within the month,” DTI-BIS director Luis Catibayan said in a text message.

Last year, the Philippine Metalworkers’ Alliance, which is a broad alliance of automotive iron and steel, electronics and electrical sectors including affiliates in key automotive industry players, filed a petition with the DTI to put in place a safeguard measure on vehicles from overseas as imports increased from 2014 to 2018. 

In particular, the country’s imports of motor cars for the transport of people rose to 207,000 units in 2018 from over 153,000 units in 2014. 

Higher imports are seen to pose a threat to the country’s car assembly operations and employment as the influx of imports reduces the opportunity to domestically manufacture cars and source parts from local suppliers. 

“At this time, we are reviewing the petition to determine if there’s a prima facie case to initiate safeguards investigation,” Catibayan said. 

After the BIS completes its evaluation, the next step would be to conduct a preliminary determination on the petition. 

“If that’s affirmative, the case is forwarded to the TC (Tariff Commission) which will conduct a formal investigation. If our preliminary determination is negative, the case is dismissed and it will not go to TC,” Catibayan said. 

Republic Act 8800 or the Safeguard Measures Act allows the government to impose safeguard measures on a product to provide relief to domestic players threatened or injured by a sudden and sharp increase in imports.

The safeguard measure can be in the form of an increase or imposition of duty on the imported product. 

As the government is evaluating the petition, automotive firms have earlier said there is a need to study the imposition of safeguard measure on vehicles carefully.

Toyota Motor Philippines Corp., the biggest automotive player in the country, has said imposing safeguard measure on vehicle imports would be against free trade and would lead to lower sales as the tariff would make automobiles expensive.

At present, vehicles from other Southeast Asian countries can enter the Philippines at zero duty.

Apart from evaluating a petition for safeguard measure on vehicles, the DTI is also studying the possibility of slapping tariff on automobile imports from Thailand. 

DTI is considering tariff on vehicle imports from Thailand as a form of compensation for non-compliance to a decision issued by the World Trade Organization on a cigarette tax case favoring the Philippines.