MANILA, Philippines - Steel prices will not go up after President Arroyo signed yesterday the EO that will remove the seven percent tariff on imported steel products. Industry players have been threatening to increase their price after prices in the world market went up.
The failure of Indian firm Global Steel Philippines Inc. to supply the domestic market with enough hot rolled coil (HRC) and cold rolled coil (CRC) resulted in the cancellation of the tariff.
An industry source said that the President signed the EO during yesterday’s Cabinet meeting in Pampanga.
The Department of Trade and Industry (DTI) earlier said that once the EO is signed it will be implemented immediately in order to help local industry players deal with the rising cost of steel in the world market.
The Filipino Galvanizers Institute (FGI) informed the DTI that they will be increasing their prices by five percent to 10 percent because they were forced to buy imported materials after Global Steel was unable to supply the domestic market with vital raw materials. World prices of steel has been going up. The imposition of the seven percent tariff has further increased their production cost.
In order to delay the planned price increases, the DTI has recommended the removal of the sevem percent tariff because under the contract of the government with Global Steel a tariff will be imposed on imported steel to protect their investment. However, in the event that Global Steel is unable to fulfill their obligation of providing 50 percent of the local demand the tariff will be eliminated to protect Filipino consumers.
Likewise, the government will study the operations of Global Steel. “The company has many problems. We have to study the feasibility of their operations,” Trade Secretary Jesli A. Lapus told reporters. “We even have reports that they cannot pay their electricity bills.”
“Time is of the essence. This is of national concern,” Lapus said on the implementation of the EO that removes the tariff.
“The government cannot protect a company that is not commercially operating. What can we do,” Lapus asked. “We have to decide for the common good.”
At the same time, Lapus said they expect Global Steel to appeal the decision of the government and maybe use this as an excuse to delay the implementation but Lapus said they are determined to do what is best for local consumers.