Local steel companies asked the government to reconsider a plan to certify steel plants abroad and treat them as if they are local manufacturers, saying this poses public safety risks and dangers to consumers.
The Philippine Iron and Steel Institute, in a letter to acting Bureau of Philippine Standards chief Ernesto Perez, said the plan might flood the market with untested steel products that could end up in homes and structures built by small contractors for the poor and the middle class.
Annual steel demand in the Philippines stands at about 4.7 million metric tons, all covered by three quality certifications last year. Some three million metric tons were sold to the reseller market, while the rest went to corporate customers, including big contractors.
PISI warned that while corporate customers test every truckload of delivery of one sample per size, per grade of steel products, the reseller market does not at all.
“This is an incongruity that must be addressed by the government since the ultimate customers in the reseller market are the small contractors and poor to middle-class Filipino home builders and owners,” the group said.
PISI cites Malaysia’s experience in granting certification to four Chinese rebar manufacturing companies. Other foreign manufacturing plants that did not undergo the certification process eventually used the certification logo. These companies exported substandard steel products to Malaysia.
Indonesia, Thailand and Vietnam do not certify steel mills abroad.
PISI said it would be difficult to pursue liabilities against steel mills abroad, citing that they had no staff nor assets in the Philippines that consumers and the government could go after.
Granting certification to foreign steel manufacturing plants will also threaten the business viability of local manufacturers.
Foreign companies, the PISI claimed, enjoyed various forms of state subsidies in their countries.
Giving them an opening “will discourage local and foreign investments in the local steel industry,” it said.
“The overall impact, therefore, is tantamount to exporting jobs abroad, a deplorable situation considering our high unemployment of around 2.4 million and underemployment affecting around 10 million Filipinos,” it said.