Government urged to nix import duty on rolled coils

MANILA, Philippines - Local steel producers are asking the government to remove the import duties on hot rolled coils (HRC) and cold rolled coils (CRC) due to the influx of prepainted and galvanized steel sheets from China.

CRC is a raw material used for the production of galvanized steel sheets while HRC is used to produce CRC.

In a statement, the Filipino Galvanizers Institute (FGI) said that aside from being allowed to enter the Philippines tax free, China is even subsidizing the export of prepainted and galvanized steel sheets.

“There is no way local manufacturers can compete in this utterly unfair and lopsided business environment. Despite urgent appeals, the government has not acted to aid the local industry,” the FGI said.

FGI explained that in violation of World Trade Organization (WTO) rules, China subsidizes exports of prepainted and galvanized roofing sheets with 13 percent tax rebate while enjoying a zero duty on exports of the same products to the Philippines under the ACFTA.

FGI said that the result is a double-edged negative impact on the competitiveness of local galvanizing industry that is confronted with high import duty on raw materials while competing with low-priced China-made roofing materials that pay no import duty at all.

According to the FGI, their request for the government to remove the import duty has been pending without action at the Cabinet-level Tariff Reform Matters Committee of the National Economic and Development Authority (NEDA) .

FGI’s appeal seeks to correct the distortion in the tariff environment that allows zero duty for finished products such as prepainted and galvanized steel roofings while maintaining a very high duty on raw materials such as HRC and CRC.

They said there is no way local industries can compete in this tariff environment. Further compounding the situation is the 13 percent tax rebate given by China for steel exports.

There are 10 galvanizing companies in the Philippines with direct employees of 5,000 and indirect workers totaling 10,000.These are Puyat Steel Corp., Union Galvateel Corp., Galvaphil Inc. Sonic Steel Industries inc., Tower Steel Corp., Philippine Steel Coating Corp., Steel Corp. of the Philippines, Chuayuco Steel manufacturing Corp., Group Steel, and AC Steel Industries.