The Department of Trade and Industry (DTI) has launched a preliminary investigation on the possible application of safeguard measures on imported vehicles based on a petition filed by a workers’ group.
Trade Secretary Ramon Lopez said in a notice dated Jan.17, but published only yesterday the DTI is conducting a preliminary probe on imposition of safeguard measure on vehicle imports following its evaluation of a petition filed by the Philippine Metalworkers’ Alliance (PMA).
He said in a separate report on the initiation of preliminary investigation on application for safeguard measures on the importation of motor vehicles, the DTI “finds prima facie evidence to initiate and conduct a preliminary safeguards investigation to determine whether motor vehicles (i.e passenger and light commercial vehicles) are being imported into the Philippines in increased quantities and is causing serious injury to the domestic industry.”
PMA, which is registered with the Department of Labor and Employment as a national union of automotive, iron and steel, electronics and electrical sectors including affiliates in key automotive industry players, filed the petition in August last year.
In assessing serious injury, DTI’s initial evaluation of the petition covered level of sales, production, profit or losses, productivity, capacity utilization, as well as domestic production.
DTI’s report showed volume of passenger vehicle imports which stood at 153,531 units in 2014, rose to 180,939 units in 2015, increased to 237,995 units in 2016, grew further to 243,129 units in 2017 and then, declined to 207,248 units in 2018.
DTI said the decline in 2018 may be attributed to the implementation of the Tax Reform for Acceleration and Inclusion law which slapped higher tax on vehicles.
For the January to September period of last year, the country’s passenger vehicle imports reached 125,419 units or 74 percent of the volume in 2018.
Imports of light commercial vehicles (LCV) , meanwhile, reached 17,280 units in 2014, and increased to 17,898 units in 2015, grew to 24,413 units in 2016, went up to 37,571 units in 2017 and then rose further to 51,969 units in 2018.
The country imported 49,524 units of LCVs in the January to September period last year or 95 percent of the 2018 level.
For the period of 2014 to 2018, the top three source countries for Philippine motor vehicle imports are Thailand, Indonesia and South Korea.
In the January to September period of last year however, Indonesia took the top spot, followed by Thailand on second place and South Korea on third.
DTI’s report also showed domestic sales of passenger cars relative to the total market was at 22 percent to 25 percent from 2014 to 2017, and fell to its lowest in 2018 as imports accounted for 84 percent.
The share of imports of passenger cars of the total Philippine market captured 75 percent to 84 percent of the market during the period of investigation.
As for commercial vehicles, domestic sales relative to the total market declined from 18 percent in 2014 to seven percent in January to October 2018.
Share of imports, meanwhile, grew steadily from 85 percent in 2015 to 86 percent in 2016, to 89 percent in 2017 and 93 percent in January to October 2018.
As the DTI is conducting its preliminary investigation, interested parties may submit their comments and position on the matter to the agency’s Bureau of Import Services within five days.
Under Republic Act 8800 or the Safeguard Measures Act, a country can impose safeguard measures or higher duties on imported goods to provide relief to local players.
The safeguard measures can be applied when it is found there is an increase in imports of a certain commodity and such has hurt the local industry.