JG Summit Olefins Corp. said Monday it welcomes the recommendation of the Tariff Commission to impose safeguard duties on imported high-density polyethylene resins.
HDPE resins are used in consumer and industrial goods, such as pipes, tanks, industrial packaging, bottles, healthcare articles, containers, toys, films, tapes and fibers.
“We thank the Tariff Commission for their positive recommendation on the safeguard petition for HDPE. We greatly appreciate that government has recognized the urgency and the need to protect local manufacturing industries especially during this difficult economic period,” said JGSOC president and chief executive Patrick Henry Go.
Plastics manufacturers, however, asked the TC to reconsider its recommendation. “We implore the TC to consider their position and the Department of Trade and Industry not to impose safeguard duties on HDPE resin,” said Philippine Plastic Industry Association president Aaron Timothy Lao.
The TC’s investigation began on Sept. 30, 2021 on the petition filed by JG Summit Petrochemical Corp. with the Department of Trade and Industry’s Bureau of Import Services on March 9, 2020. JGSPC merged with JGSOC on Jan. 1, 2022, with the latter as the surviving entity.
JGSOC said the application of a safeguard measure for HDPE for a period of three years would help the local petrochemical industry recover from the damage that the proliferation of imported HDPE caused in the previous years.
It said this provides the local petrochemical industry, which is a strategic manufacturing sector with strong supply chain linkages, much-needed time to further improve its production capacity, utilization rate and price competitiveness.
“It is our prayer that with continued support from the government, the domestic petrochemical industry can carry on with its roadmap to becoming globally-competitive and to achieving long-term viability. This decision of the commission is an encouraging step also for other local industries and for all who are looking to invest in the Philippines, where both government and private sector work together towards economic self-sufficiency,” Go said.
PPIA said, however, the TC decision would benefit only one producer at the expense of the downstream manufacturing industry dominated by micro, small and medium enterprises that are employing hundreds of thousands of Filipinos.
PPIA said the added duties would increase the cost of packaging materials and plastic products and add to the increasing inflation.
The safeguard duties will also result in tariff distortion where cheaper imported finished products will continue to proliferate in the market, the group said.
PPIA said the findings in the TC investigation report were not consistent with the facts presented during the hearings.