The Department of Trade and Industry (DTI) said it is mandated to follow the ruling of the Tariff Commission (TC) over the removal of safeguard duties on imported car units.
This, after the Philippine Metal Workers’ Alliance (PMA) asked the Trade department to reject the TC report on the matter.
“Unfortunately, based on rules and jurisprudence, the DTI secretary cannot impose any definitive safeguard measure if TC makes a negative final determination,” Trade Secretary Ramon M. Lopez told the BusinessMirror.
He said that the “DTI is left with no option but to abide by the TC ruling.”
In a report last month, the commission recommended that no definitive general safeguard measure should be in place for the importation of motor vehicles.
The DTI previously imposed provisional safeguard duties in the form of a cash bond amounting to P70,000 per unit for imported passenger cars and P110,000 per unit for imported light commercial vehicles in January. Based on DTI’s previous reports, both the imports of passenger cars and light commercial vehicles increased significantly compared to domestic production during the period of investigation.
According to Republic Act 8800 or the Safeguard Measures Act, the government may impose “general safeguard measure upon a positive final determination of the Commission that a product is being imported into the country in increased quantities…as to be a substantial cause of serious injury or threat thereof to the domestic industry.”
The investigation of TC, however, revealed that the locally manufactured passenger cars and light commercial vehicles can compete with imported units of the same kind because “they are substitutable with the latter in the market by providing consumers with an alternative for satisfying their needs and tastes for said product.”
According to the commission, there was no surge of imports of passenger car and light commercial vehicle units during the point of investigation from 2014 to 2020, both in absolute terms and relative to domestic production.
But PMA, in a recent statement, claimed that the TC’s report “ignored” the import surge of the car units.
“The TC stood by the erroneous conclusion in its preliminary report on the investigation on the surge in imports of automotive vehicles, and adopted the same findings in its final report,” PMA National President Ruel Punzalan said.
“Furthermore, despite the fact that the Covid-19 pandemic affected global trade, the TC still decided to include data from 2020 to make its problematic conclusion. It is as if it wasn’t obvious that the trend on the importation of vehicles was merely disrupted, but not fundamentally changed,” the labor group added.
According to PMA, the total imported CBU (completely built unit) motor vehicles rose to 221,746 in 2019 from 103,907 in 2014.