The Bureau of Customs (BOC) is imposing provisional safeguard duty on imported ceramic floor and wall tiles for 200 days to protect and promote competitiveness of domestic industries and producers.
The duty shall come in the form of cash bonds and imposed in the amount of P3 per kilogram of imported ceramic tiles classified as AHTN (Association of Southeast Asian Nations Harmonized Tariff Nomenclature) Codes 6907.2214, 6907.2121, 6907.2193, 6907.2194, 6907.2213, 6907.2214, 6907.2293, 6907.2294, 6907.2313, 6907.2314, 6907.2392, 6907.2394, and 6907.4092. This is pursuant to Customs Memorandum Order (CMO) No. 28-2019 dated and signed on June 17.
The provisional safeguard duty will be imposed for a period of 200 days and applied to specific tariff headings enumerated in CMO 28-2019, which takes effect 15 days after its publication on July 5.
The duty is imposed pursuant to Department of Trade and Industry’s (DTI) Department Order (DO) No. 19-06, series of 2019, which implements Section 8 of Republic Act (RA) 8800, or The Safeguard Measures Act. The act provides for the imposition of duty “in critical circumstances where a delay would cause damage which would be difficult to repair, and pursuant to a preliminary determination that increased imports are the substantial cause of serious injury to the domestic industry.”
The temporary safeguard measure is being imposed following a preliminary investigation initiated by DTI to determine whether increased imports of ceramic floor and wall tiles under several AHTN codes were causing, or threatening to cause, serious injury to the domestic industry. The investigation period was from 2013 to 2017, with updated data for 2018.
DO 19-06 noted that it was “found after preliminary determination that increased imports of ceramic floor and wall tiles have caused serious injury to the domestic industry.”
DTI’s preliminary investigation showed that in absolute terms, the volume of imports of ceramic floor and wall tiles increased from 2013 to 2016. In 2017, imports were lower by 13% from the 2016 level, but higher by 2,170% than in 2014 or the pre-surge level.
In relative terms, the share of imports to domestic production increased from 4% in 2013 to 641% in 2016. In 2017, the share of imports was recorded at 549%, lower by 92% than the 2016 level, but higher by 523% than 2014 or the pre-surge level. In 2018, share of imports was recorded at 542%, lower by 7% compared to 2016 level, but higher by 516% than in 2014.
DTI said the domestic industry has suffered serious injury caused by increased imports because despite significant increases in market size, the market share of domestic manufacturers declined from 96% in 2013 to 15% in 2017 and 2018.
In addition, earnings before interest and taxes exhibited a declining trend of 71% in 2014, a sharp decline of 203% in 2015 when the operations resulted in loss, an increase of 92% in 2016 which meant operation improved compared to 2015 but the industry remained at loss. In 2017, the industry’s operation continued to exhibit losses with the highest decline of 1,067% and further decline of 157% in 2018.
Imports originating from developing countries, as listed in Annex A of DO 19-06, covered by Rule 8.8 of the implementing rules and regulation of RA 8800, shall not be subject to the provisional safeguard measure.
Also, unglazed, porcelain, mosaic, and marble tiles are excluded from the investigation since they are not produced locally.
Further, the preliminary investigation excluded glazed ceramic tiles imported from the European Union since these tiles do not compete with locally produced tiles.
Importers of ceramic floor and wall tiles originating from a country that is exempt from the provisional safeguard duty shall submit a certificate of origin issued by the authorized agency/office in the source country of manufacture, authenticated by the Philippine embassy/consulate general.