Favila to review safeguard tariff lifting on soaps

Trade and Industry Secretary Peter B. Favila agreed yesterday to review the lifting of safeguard duty on imported tripolyphosphates-technical grade (STPP-TG), a key ingredient in laundry detergent.

Favila has issued an order dismissing the application for a definitive general safeguard measures against imported STPP-TG as the earlier imposed tariff expired last month.

The Fair Trade Alliance (FTA) together with the Chemical Industries of the Philippines Inc. (Chemphil Group), the sole manufacturer of STTP-TG in the country, met with Favila yesterday morning to protest the removal of the safeguard measure.

"We went there to present the position of Chemphil, FTA  and FPI (Federation of Philippine Industries)," Rene Ofreneo, FTA executive director told reporters after the meeting with Favila.

"We need calibrated protection in terms of values and in terms of jobs," Ofreneo said.

Ofreneo said Favila agreed to study the materials given by Chemphil and take a second look on the lifting of the tariff. "He (Favila) would be the last person to want to see an industry or company go down," Ofreneo said.

Chemphil has already said it will close operation by end of May if DTI will not reconsider its decision to lift the safeguards duty on STTP-TG imports.

"If this continues, we will close in a month’s time or no later than May 30," said Alexandra Garcia-Verzosa, chief operating officer and director of Chem-phil.

According to Verzosa, they are not looking for permanent tariff. "We just need the safeguard measure for three years. We have a three-year plan that will make us competitive after three years," she noted.

The import surge has lessened the demand for locally produced STTP-TG. To maximize plant capacity, Verzosa said they need to supply 72.7 percent of the market which translates to 2000 tons per month.

As part of their three-year plan, Verzosa said Chemphil will invest P10 to P20 million. The money, which will be generated internally, will be used to help the plant become more cost effective. One of the cost cutting measures to be implemented is the shift from the use of kerosene to Liquefied Petroleum Gas (LPG).