DTI issues order dismissing safeguard measures on cars

MANILA, Philippines — The Department of Trade and Industry (DTI) has junked the petition for safeguard measures on vehicle imports and directed the return of cash bonds collected from importers for their car shipments.

In DTI Administrative Order 21-04 signed by Trade Secretary Ramon Lopez on Aug. 6 but released only yesterday, the agency said it has dismissed the petition from the Philippine Metalworkers Alliance (PMA) for the imposition of safeguard measures on imported passenger cars (PCs) and light commercial vehicles (LCVs).

“All cash bonds that have been imposed and previously collected on shipments of motor vehicles (PCs and LCVs) which entered or were withdrawn from warehouses in the Philippines for consumption from Feb.1, 2021, the date of the effectivity of  CMO (Customs Memorandum Order) 6-2021, shall be immediately returned to the concerned importers,” the DTI said.

The DTI’s order follows the recommendation of the Tariff Commission (TC) that there is no need to impose definitive general safeguard measures on PC and LCV imports.

In its probe, the TC found there was no increase in imports whether in absolute terms or relative to domestic production during the period of investigation covering 2014 to 2020.

The TC conducted its probe on the case following a request from the DTI.

Earlier this year, the DTI imposed provisional safeguard duties in the form of cash bond amounting to P70,000 for an imported PC unit and P110,000 for an imported LCV unit after its evaluation of the PMA’s petition.

In its evaluation, the DTI saw a link between the country’s increased vehicle imports and serious injury to the local industry, which saw a reduction in market share, sales and employment.

To comply with the provisional safeguard duties imposed by the DTI, automotive firms were collecting deposits from customers purchasing vehicles covered by the measure.

The DTI said the new order would take effect upon issuance of the relevant CMO.

Chamber of Automotive Manufacturers of the Philippines Inc. president Rommel Gutierrez earlier said the TC’s recommendation showing there is no basis for imposition of safeguard duty on vehicle imports puts to rest industry uncertainties.

Moving forward, he said the automotive manufacturing sector would also continue to work with the government in efforts to sustain local vehicle production and to address concerns of stakeholders.

Under Republic Act 8800 or the Safeguard Measures Act, safeguard measures or higher tariff on imports may be imposed to help the domestic industry hurt by a surge in imports of like products.