The Philippine Plastics Industry Association said Monday it opposes the anticipated slapping of safeguard duties on imported high-density polyethylene and low linear density polyethylene that will bring additional cost to locally-manufactured plastic-based consumer products.
PPIA president Danny Ngo said the safeguard duties, once implemented, would result in a “serious domestic injury triggering additional price increases on local commodities with its spawning impacts over a wide spectrum of basic consumers’ goods from food, beverage, cosmetics, personal and home care, medicines and a lot more.”
Ngo said about 417 plastic downstream enterprises employing more than 23,000 workers would be severely affected if the government imposed the safeguard duties. The industry has more than 23,000 consumer products manufacturers, with an aggregate 343,262 workers, contributing about P1.79 trillion to the national output.
“The move is very untimely amidst the pandemic where local industries and businesses, at present, are still recovering from losses, and the majority of Filipinos were battered by the series of lockdowns following health protocols and mobility restrictions that forced many livelihood activities to stop,” said Ngo.
PPIA said, “the real issue here is not from us but originated from the petitioner itself when JGSPC [JG Summit Petrochemicals Group] commercially operated its naphtha cracker plant in 2016 to also produce PP and other petrochemical additives, and when they started failing to deliver the HDPE and LLDPE raw material supplies orders of the downstream sector.”
Ngo said the lapses created a severe shortage of raw materials that significantly disrupted the entire supply chain in the downstream plastic sector.
He said the alarming situation inadvertently compelled the local plastic converters to source their raw materials from stable and steady foreign suppliers so that their production plants would continue to operate, as many already stopped, other partially-operated, given the raw material shortage.
He said what happened was not import surge, as there was neither bad intention nor manipulation on the part of the downstream sector to create a supply abruption.
“Rather, it was all due to the ill consequences arising from the petitioner’s internal problem itself, and the natural reaction of an industry user deprived of raw material supply. We cannot just wait and see this problem. We badly need to find a solution for our industries to survive, which for years have been steeply competing against more than 70 percent imports of cheaper products from China,” he said.
Ngo said the imposition of additional duties on HDPE and LLDPE even on provisional period would make local industries very uncompetitive against the huge influx of cheaper foreign goods.
“Worst, those gravely affected may consequently shut down operations because 95 percent of the companies affected are SMEs that have no capacity to absorb unnecessary costs. The country will be flooded by cheaper packed-products,” he said.