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Plastics manufacturers say safeguard duty on raw materials to raise consumer prices

JGSPETROCHEM.COM

THE safeguard duties imposed on raw materials used in plastic products will raise the prices paid by consumers, the plastics manufacturing industry said.

The duties were imposed on high-density polyethylene (HDPE) granules and pellets, a measure which the Philippine Plastics Industry Association, Inc. (PPIA) called burdensome for the public, to which the costs will be passed on.

Consumers “will be on the losing end as they have to contend with the increase in prices and this also contributes to inflationary pressures. Their take home pay will be affected,” the PPIA said in a statement on Monday signed by PPIA President Aaron Timothy Lao and PPIA 1st Vice-President Benjamin Chua.

“Products such as packaging for basic necessities such as food and beverages, personal care; as well as cosmetics (and products used by industries like) agriculture and fisheries, pharmaceuticals, medical and health institutions, construction, public utilities, autos, retail, and others will be affected by the additional safeguard duty,” the group added.

The Department of Trade and Industry issued Department Administrative Order 22-13 dated Sept. 30 imposing safeguard duties on imported HDPE pellets and granules for three years. The safeguard duty is P1,338 per metric ton (/MT) in the first year, P1,271/MT for the second, and P1,208/MT for the third.

The safeguard duty petition was originally filed by JG Summit Petrochemical Corp., (JGSPC) which was later taken up by JG Summit Olefins Corp. after a merger earlier in the year.

“The safeguard duty favoring JGSPC will also (exert) more pressure on plastic product manufacturers. Imported finished products are being imported at 0% duty leaving manufacturers at a price disadvantage. This will result in an influx of imported finished plastic products. This will cause more job losses while we are all recovering from the pandemic,” the PPIA said.

“The industry… will be left with no choice but to adjust its sails in order to survive. Recently, the plastic industry has been facing numerous adversities — the enactment of the Extended Producers Responsibility Act (and) the pending excise tax bill for single-use plastics. Not to mention, plastic-banning ordinances by local government units,” the PPIA said.

According to the PPIA, the plastic converter industry employs over 70,000 and generates P149 billion in revenue. It was citing data from the Statistics of Manufacturing Establishments by Industry Group: Annual Survey of Philippine Business and Industry report, issued in 2020. — Revin Mikhael D. Ochave

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