Cheap China Imports Killing our Local Industries

Data from Philippine Statistics Authority on Balance of Trade indicate that imports from China is approximately twice Philippine exports to China in terms of dollar value while the Philippines balance of trade with the United States shows exports is higher by about 20% (Source: PSA Data.

Back in mid-nineties during the term of President Ramos, I was one among the Filipino Engineers who initiated and conceptualized the construction of a polypropylene plant in Limay, Bataan. The plant which cost about half a billion dollars was only operated for a few years before totally closing its doors. The reason given was due to a propylene feedstock shortage as per industry sources. However, I believe that cheap China polypropylene imports mainly contributed to the demise of the 160,000 MT/year plant. The local production cost of polypropylene per kilogram is much more that the selling price of China imports making it too difficult to sell its produce.

In the steel industry, there are only few companies which have galvanizing lines. However, there are a lot of roll forming companies buying cheap non-compliant products with the Philippines Standards. These sub-standard products are marketed as standard products which make locally galvanized products to be much more expensive and non-competitive. At the end of the day, Class C-D-E consumers do not care much on standards as long as it satisfies their budget. A 250,000 MT/year galvanizing line in Region IV-A is only operating several times in a year due to a meager market share. If this scenario last longer, chances are....

The Anti Dumpling Law of the Philippines (RA 8752) was enacted in July 15, 1999. It was not a deterrent however to prevent cheap China imports. RA 8752 does not have the might to go against dumping or probably due to the long legal process a petitioner need to undergo. It is similar to the LTFRB notices on public transport that anybody could report abusive drivers and operators but the complainant need to appear to the LTFRB offices for hearings.

Unless the Philippine government will strengthen the Anti Dumping Law to give more teeth and easier processing and the Department of Trade and Industry to strictly impose product standards, there will be more closures of local businesses which cannot compete with cheap China imports.

About the Author

Ver Pangonilo
A Filipino Engineer, Registered Professional Engineer of Queensland (RPEQ) - Australia and Professional Electrical Engineer (PEE) - Philippines with extensive experience in concept select, front-end engineering, HV & LV detail design, construction and commissioning of Hazardous and Non-Hazardous Area electrical installations in water and waste water pipeline and pumping facilities, offshore platforms, hydrocarbon process plants and pipelines including related facilities. Hazardous area classification and design certification (UEENEEM015B, UEENEEM016B, UEENEEM017B).
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