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A three-year definite safeguard duty will be imposed by the Philippines on imported high-density polyethylene pellets and granules from various countries to prevent serious injury to the local HDPE industry
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Under DTI Department Administrative Order No. 22-13, the safeguard duty will be P1,338 per metric ton in the first year of implementation, P1,271 per MT in the second year, and P1,208 per MT in the third year
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DAO 22-13 takes effect when the Bureau of Customs has issued a relevant memorandum order on the safeguard duty
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The Tariff Commission has found “there exists an imminent threat of serious injury and significant overall impairment to the position of the domestic HDPE industry”
The Department of Trade and Industry (DTI) slapped a three-year safeguard duty on imported high-density polyethylene (HDPE) pellets and granules to prevent imminent serious injury to the local HDPE industry.
Under DTI Department Administrative Order No. 22-13 dated September 30, the safeguard duty will be P1,338 per metric ton in the first year of implementation, P1,271 per MT in the second year, and P1,208 per MT in the third year. The duty should be applied to HDPE classified under the ASEAN Harmonized Tariff Nomenclature (AHTN) 2017 Code 3901.20.00.
HDPE is used to produce plastic bottles, corrosion-resistant piping, geomembranes and plastic lumber.
DAO 22-13 takes effect upon the issuance of a relevant customs memorandum order by the Bureau of Customs.
Imports of HDPE from developing countries listed under DAO 22-13 will not be subject to the definitive safeguard measure.
The definitive safeguard measure excludes polyethylene (PE) wax, ethylene acrylic acid copolymer, polypropylene, low-density polyethylene, and polyethylene terephthalate resin.
Imported HDPE grades specially made for use in the manufacture of wire and cable jackets/coatings will likewise be excluded from the definitive safeguard measure. DAO 22-13 noted that the domestic PE industry does not produce HDPE grades that can used by the wire and cable industry.
Also, HDPE used in rotational moulding process applications generally comes in powder form with a particle size of 500 microns or below, a melt index of 4.0 gram/10 minutes, and a density of 0.93-0.94 grams/cubic meter, will also be excluded from the measure as the domestic PE industry does not produce such products.
Importers of HDPE from countries that are exempt from the safeguard duty and those not covered by preferential tariffs should submit a Certificate of Country of Origin issued by the authorized agency/office in the source country of manufacture affixed with an apostille or authenticated by the Philippine Embassy/Consulate General, as applicable.
DAO 22-13 is pursuant to the recommendation of the Tariff Commission after it found out in a formal investigation that “there exists an imminent threat of serious injury and significant overall impairment to the position of the domestic HDPE industry in the near future.”
It said this is shown by the significant increase in HDPE importations in 2021, “pointing to a high likelihood that substantially increased imports will continue into the near future.”
DAO 22-13 also said it is highly likely that higher exports of HDPEs to the country in the near future, as top suppliers of the product such as Malaysia, Thailand, Singapore, and Indonesia are diverting from their primary export markets to the Philippines, their important alternative market.
TC also noted that there was “significant deterioration in the overall position of the domestic HDPE market during the period of import surge”, adding that the increase in imports in the first half of 2021 was “recent, sudden, sharp, and significant enough.”
“Serious injury to the domestic HDPE industry would occur imminently if a definitive safeguard measure against importations of HDPE is not applied,” TC said.
The commission said that for the local industry to adequately supply domestic requirements, it needs a level playing field to compete with imports and allow the local industry’s manufacturing base and sales to expand and generate more jobs for Filipinos.
TC added that users of HDPE pellets and granules will retain their option to choose between local and imported products since imports will still be allowed. Imposing a safeguard measure is also “not expected to cause shortage” of the products covered in the domestic market.
In September 2021, DTI requested TC to formally investigate to determine the merits of imposing a definitive safeguard measure on importations of HDPE pellets and granules from various countries after its preliminary investigation found “a causal link exists between increased imports of the products under consideration and serious injury to the domestic industry.”
DTI is mandated by Republic Act No. 8800 (the Safeguard Measures Act) to protect the domestic industry from serious injury caused by a surge in imports.
The review came after JG Summit Petrochemical Corp. – now JG Summit Olefins Corporation (JGSOC) after a merger of the two with the latter as the surviving company – alleged in 2020 that “serious injury to the domestic industry” was caused by the increased volume of imported HDPE.
JGSOC produces 100% of the total domestic HDPE output.
