Steelcorp clarifies tariff incentive

Steel Corp. of the Philippines (Steelcorp) clarified yesterday that the tariff incentive which it got from the government is provided under Republic Act 7103 also known as the Iron & Steel Industry Act.

The clarification was issued by Steelcorp in response to a recent press statement of the Filipino Galvanizers Institute (FGI) which threatened to sue the National Economic Development Authority (NEDA) and the Tariff and Related Matters (TRM) Committee for granting zero tariff duty for the importation of hot rolled steel coils.

Republic Act 7103 was authored by then Sen. Teofisto Guingona and was enacted into law in 1990 with the objective of modernizing and upgrading the local steel industry to achieve Philippine industrialization and meet the challenges of globalization.

Among the benefits provided by RA 7103 is a rational tariff incentive and protection scheme, specifically on imported raw materials. Invoking the provision of the Act. EO 237 grants zero tariff duty on hot rolled coil (HRC) if imported by a RA 7103 enterprise. Otherwise, the tariff remains at three percent.

Rolando A. Jaurigue, senior vice president of the Philsteel group noted that the threat of a lawsuit by FGI and its members against NEDA/TRM is uncalled for as this would send the wrong signal to potential investors eyeing the Philippines.

"Accusing NEDA and the TRM Committee of going beyond their authority is unfair since it is simply doing its job. RA 7103 specifically mandates NEDA to recommend to the appropriate authority a rational tariff incentive and protection scheme to enhance the viability of the project. NEDA and the TRM Committee are committed to induce and encourage more investments and further develop the iron and steel industry", he said.

Jaurigue maintained that RA 7103 is not exclusive to Steelcorp. "All FGI members are free to implement similar projects and obtain similar incentives for as long as they meet the provisions and conditions of the law. Unfortunately, aside from Steelcorp, no other galvanizer invested under the Act."

Steelcorp is registered under the BOI Omnibus Investment Act as a pioneer undertaking and was certified by the DTI-BOI as an eligible project under R.A. 7103 as an intermediate steel producer with entitlements to the incentives provided by both laws. These incentives are given to certified enterprise to enhance the viability of projects in consideration of its huge capital investment. This is underlying spirit and intent of both the Omnibus Investment Act and the Iron and Steel Industry Act in promoting investment on new technology and industrial facilities in the country.