Downstream steel industry bucks hike in tariff rates

Now that the creditor-banks of National Steel Corp. (NSC) have signed a deal with Global Infrastructure Holdings Ltd. (GIHL), the downstream industry is urging Trade and Industry Secretary Cesar V. Purisima not to indiscriminately raise tariff rates to protect the soon-to-be reopened steel plant.

In a letter to Purisima, the Philippine Iron & Steel Institute (PISI) said that "tariff rates should not be altered indiscriminately because resulting distortions have adverse, large-scale repercussions especially on the viability and competitiveness of its intended customers, the downstream industries."

PISI president Wellington Tong argued that "if any tariff changes are being planned in relation to NSC’s reopening, these must be carefully viewed in an overall context – taking into account complicated inter-linkages within the industry, the tariff hierarchy, as well as the country’s multilateral commitments and obligations."

Tong assured that the downstream industries "support the government’s plan to have qualified investors reopen NSC."

However, Tong said, "such investors must possess proven financial, managerial, technical, and operational capability."

He added that the chosen investor should also have a business plan that allows them to contribute to the overall growth and development of the local steel industry and the Philippine economy.

"NSC must not be merely propped up by unjustified incentives and made artificially viable," Tong warned.

Tong concluded that in the spirit of transparency, the Department of Trade and Industry should initiate and pursue consultations with industry associations before committing to any form of protection.