THE Department of Trade and Industry (DTI) has begun an investigation into whether or not the government needs to apply safeguard measures for imported corrugating medium, a crucial paper product used in making paper boards and cardboard boxes.
In an advisory dated February 11, the DTI said it has officially received a properly documented application from the Pulp and Paper Manufacturers’ Association of the Philippines (Pulpapel) to start a review which will cover 2019 to 2023.
“The application alleged that the increased imports have contributed significantly to the serious injury suffered by the local industry,” said the DTI, which also cited that it had found a “prima facie” case to justify the probe.
According to the DTI’s preliminary report, imports of corrugated medium from various countries have increased from 74,984 metric tons (MT) in 2019 to 89,311 MT in 2023.
“It steadily increased in 2021 and 2022 by 18 percent and 16 percent respectively, which may be attributed to the economic slowdown due to the COVID-19 pandemic,” read the report.
“However, imports of the subject product rose sharply in 2023 by 77 percent (to about 89,000 MT).
In the first half of 2024, the import volume had already reached around 93,000 MT or 103 percent of the 2023 level,” the report read further.
The biggest suppliers of corrugating medium to the Philippines are Japan, Indonesia, Australia and Vietnam during the specified period of investigation.
During the five years that were cited, imports of these products from Japan accounted for 45.6 percent of the total.
Meanwhile, 16.7 percent came from Indonesia, 13.7 percent from Australia, and 12.7 percent from Vietnam.
The DTI’s report also reported fluctuating but significantly lower sales volume of corrugating materials produced locally.
Sales volume of these materials produced locally stood at 100 MT in 2019, 81 MT in 2020, 93 MT in 2021, 101 MT in 2022, and 100 MT in 2023.
“In 2023, domestic sales volume and value declined by 2 percent and 12 percent,” said the report.
“According to the domestic industry, sales declined due to a surge in imported paper caused by slow demand in major markets,” it noted, referencing the slowdowns in China, United States, and Japan.
“Majority of large foreign mills have excess capacity resulting to the offering of cheap imported prices to the Philippine market in order for them to utilize their production capacity,” it added.
This, in turn, forced local paper mills to decrease their selling prices in order to compete, with some forced to shut down their machines as overseas mills ate their market share, the report indicated. (Alden M. Monzon © Philippine Daily Inquirer)
