Cabinet body rejects plea to lower duty on steel products

The Cabinet committee on Tariffs and Related Matters (TRM) has rejected the petition of midstream steel producers to lower the duty on steel products, effectively pre-empting today's public hearing on steel tariffs.

During its meeting this week, the Cabinet committee decided to maintain tariffs on steel products at seven percent as government struggles to protect local midstream producers.

Trade and Industry Secretary Manuel Roxas II told reporters yesterday that the committee had decided that tariffs on steel products would stay at seven percent. This developed as the Tariff Commission prepared to conduct the public hearing today to discuss pending petitions by downstream producers to reduce tariffs on cold rolled coils and tin plates.

Pending before the commission is the petition filed by Filipino Galvanizers Institute, Puyat Steel Corp. and Sonic Steel Industries to bring down duties from seven percent to three percent on their main raw material, cold rolled coils and tin plates. Cold rolled coils and tin plates are mostly imported from Russia, especially since the National Steel Corp. is no longer producing steel products since its shutdown last November.

At present, there are at least 12 companies that use CRC to manufacture galvanized iron and pre-painted steel.

Earlier, government decided to maintain the seven-percent tariff on hot rolled coils (HRCs) as a move to protect the operations of the NSC.

Roxas said there was no decision yet on whether the reduction would be implemented finally since the NSC had already shut down its operations which meant that it would be unable to meet the conditions for continued tariff protection.

Under Executive Order No. 63, NSC has to utilize at least 50 percent of its total HRC production capacity in order to qualify for continued protection. However, the company had repeatedly failed to meet this condition and at one point slipped to only 30 percent of its capacity.

Hot rolled coils are used for flat steel products such as iron sheets, tubes and pipes. The country's supply, however, is mostly imported since NSC's production is way below domestic demand.