THE Tariff Commission has recommended the imposition of safeguard measures against imports of high-density polyethylene (HDPE) pellets and granules for three years.

In a report dated June 27 and posted on its website, the commission found a “causal link between the imminent threat of serious injury to the local HDPE industry in the near future and increased imports of HDPE.”

The commission recommended an ad valorem safeguard duty of 2% for HDPE imports.

HDPE resins are used in consumer and industrial packaging.

“The commission hereby recommends the application of the appropriate definitive general safeguard measure on imports of HDPE to prevent the imminent occurrence of serious injury to the Philippine HDPE industry. The commission further recommends that the definitive safeguard measure be applied for a period of three years,” it said.

“This (2%) rate of duty will allow the domestic industry to adjust its selling price to a level that will allow full recovery of its cost of production,” it added.

The commission said the investigation, carried out between 2015 and June 2021, found that HDPE import volume in 2021 rose to 61,410 metric tons (MT), up 52% from 2018 levels, and exceeding the average import level between 2015 and 2018 by 56%.

“The surge in imports of HDPE, which commenced in 2021, directly caused the deterioration in the overall position of the domestic HDPE industry in the final period of the six-and-a half-year investigation,” the commission said.

It said it deems import levels in 2019 and 2020 to be “not normal” even when considering the planned shutdown of JG Summit Olefins Corp. for maintenance as well as the impact of the pandemic.

“In particular, increased volumes of HDPE imports by traders prevented the local HDPE industry from improving its performance and reaping the growth potential of an expanding Philippine market for HDPE,” the commission said.

The report has been submitted to the Trade Secretary for a final decision on safeguard duties.

Under the implementing rules and regulations of Republic Act 8800 or the Safeguard Measures Act, the Trade Secretary has 15 calendar days from receipt of the report to decide on a Tariff Commission recommendation.  

JG Summit Olefins, asked to comment on the commission’s findings, said in a statement that it welcomes the recommendation for safeguard measures.

“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,” Patrick Henry Go, president & CEO of JG Summit Olefins, was quoted as saying.

“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,” Mr. Go added. — Revin Mikhael D. Ochave