Zero percent tariff for coil imports approved
Posted on May 2nd, 2010
To offset the coming price increase of galvanized iron (GI) sheets and other finished products, the steel coil imports may be allowed to enter the Philippines duty-free soon. Trade secretary Jesli A. Lapus said that the Tariff and Related Matters (TRM) committee has approved the 0% tariff for rolled coils last April 28 in order to avoid supply shortage and price hikes.
However, the decision will still have to go through the National Economic and Development Authority (NEDA) board. The 0% tax levy came about because the local firm that has benefited from the current 7% tariff protection failed to meet operational criteria.
The price of GI sheets were due to be increased by 5-10% this month by several galvanizers that crimp and coat the steel coils to make the GI sheets, due to the rising iron ore costs worldwide. It was only deferred when the trade department talked to the firms and told them to wait for possible slashing of tariffs.
It was clarified by Lapus that the tariff would revert back to 7% “the moment Global Steel Philippines, Inc. is in commercial operation.”
The 7% tariff was imposed to protect Global Steel’s P13-billion bid to acquire and revive National Steel Corp. Before the 7% rate was imposed, the tariff stood at 3%. The tariff protection was issued in 2004 via Executive Order 375 and kicked in 2007 when Global Steel was deemed to be running at least 50% of its registered capacity.
However, this privilege came under scrutiny when Global Steel’s production in its Iligan plant reportedly slowed and even halted at the height of the economic downturn. And because they didn’t meet the old executive order, it is now the consumers who are penalized by higher prices.
