Steel firms decry ‘undue haste’ in grant of tariff protection to NSC

The first public hearing for the tariff petition of Global Steelworks International Inc. (GSII) ended yesterday in an uproar as downstream steel players decried the undue haste in granting GSII’s request.

Filipino Galvanizers Institute president Salvio Perez said that while GSII had submitted its request for tariff protection to the National Economic and Development Authority (NEDA) as early as February this year, the request was forwarded to the Tariff Commission (TC) only last week.

Immediately, thereafter, the Department of Trade and Industry (DTI) ordered the TC to conduct a public hearing.

During yesterday’s hearing, the TC asked the downstream oppositors to submit their counter argument by today, thus causing an uproar over the undue haste.

According to Perez, the downstream steel industry is opposed to any form of tariff protection for GSII.

GSII should be competitive, not by way of tariff protection, but by way of product quality, service quality and the only way to do so is for the new owners to modernize and upgrade its facilities," Perez said.

The Philippine Chamber of Commerce and Industry (PCCI) is also opposing the petition for a tariff hike on hot roiled coils, cold roiled coils and tinplates.

In its position paper, PCCI expressed strong contention on the request of GSII or National Steel Corp.’s (NSC) apparent investor for an increase on tariffs of these steel products as a condition for its takeover of the steel company.

PCCI further expressed strong support to the clamor of the downstream industries, asking for the urgent resolution on the matter by implementing a status quo on the tariffs for steel.

"PCCI welcomes government’s intervention in reviving the operations of the NSC. NSC was a significant part of the Philippine steel industry while it was fully operational. However, NSC is not the Philippine steel industry and is just a part of the industry," the group said.

Alongside NSC, there are other steel manufacturing companies whose contribution to both revenues for government and employment are more significant than that of NSC. There are an estimated 65,000 employed in the downstream industry against NSC’s 2,500 persons before it shut down in 1999.

The local galvanizers fear that with tariff cover, GSII may not ensure quality and yet add to the cost of local downstream steel users.

They also fear that the haste to conduct and conclude the hearing as soon as possible is to enable Malacañang to issue an executive order regarding the tariff for hot and cold roiled coils and tinplates before Congress resumes session this month.

Sources disclosed earlier that a proposed tariff structure of five percent tariff on hot-roiled coils and seven percent on cold-roiled coils and tinplates appears to be shaping up even though the proposal of the downstream steel industry players has not been heard.

The hearing is now, thus, being viewed a mere pro forma even though a decision might already have been made to grant the tariff cover to GSII.

GSII is petitioning for tariff protection for its products comprised of steel billets, cold and hot-roiled coil and tin plates.

Trade and Industry Secretary Cesar V. Purisima has not taken any position on the tariff request and is specifically asking for the meeting to determine NSC’s needs and the concerns of downstream steel industry players.

NSC/GSII wants tariff protection to enable it to recover while it starts up manufacturing operations.

On the other hand, downstream steel industry players argue that they would be adversely affected by a rise in tariff rates especially since NSC does not have the capacity to provide the needs of the local downstream industry players.