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No safeguard duty for porcelain tiles

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By Lee C. Chipongian

Imported porcelain tiles are exempted from the P3 per square meter provisional safeguard measure imposed by the Department of Trade and Industry on imported floor and wall tiles to protect local manufacturers from import surges.

This was contained in a Customs Memorandum Order No. 42-2019 issued on August 8, 2019.

The new CMO was a result of amended order of DTI Administrative Order No. 19-06 series 2019. Under the new DAO 19-11 series 2019, imported porcelain tiles with water absorption of less than 0.5 percent and are not manufactured locally are now exempted from the provisional safeguard measure.

The imported porcelain tiles are classified under AHTN (Asean Harmonized Tariff Nomenclature) codes 6907.2123, 6907.2124,8907.2193, and 6907.3194.

Engr. Napoleon Co, chairman of Ceramic Tiles Importers Association, said they met with DTI Secretary Ramon M. Lopez to seek for a clearer exemption of imported porcelain tiles because these are not produced locally.

Co said that imported porcelain tiles are more preferred now than the small sized ceramic tiles produced locally. The imported porcelain tiles also cost higher at $5 and up per square meter as against the $2 and up per sqm local ceramic floor and wall tiles.

At least 50 percent of imports come from China and the rest are from Asean countries such as Vietnam, Thailand, Indonesia and Malaysia. The high-end porcelain products from Italy and other EU countries.

In imposing the provisional safeguard duty on imported ceramic tiles, the DTI said that based on its preliminary findings the domestic industry suffered serious injury caused by the import surge.

DTI noted that the share of domestic tile manufacturers declined to 15 percent in 2017 and 2018 from 96 percent in 2013 due to increased importation.

Imported tiles grew to 87 percent in 2016 from 4 percent in 2013.
As a result, domestic manufacturers’ earnings declined to 71 percent in 2014 and 203 percent in 2015.

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