Support local steel industry, strengthen gov’t regulatory functions -- Scientist group

Posted:

September 8, 2017

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The entry of foreign substandard steel and electrical products to local markets will lead to the disappearance of the small and barely surviving local steel industry unless addressed. We in AGHAM - Advocates of Science and Technology for the People call on the government to support the local steel industry and create an economic environment favorable for its growth.

A draft Department Administrative Order (DAO) by the Department of Trade and Industry covering new rules on product-certification schemes grants foreign-owned steel plants the opportunity to use the Philippine Standard (PS) safety mark on their products, a privilege previously solely granted to Filipino-owned steel manufacturers. This is despite numerous documented cases of entry to Philippine markets of substandard steel that did not pass government safety standards.

In Luzon, 56 hardware stores in Pangasinan and La Union were found to be marketing substandard steel and electrical products. The situation is similar in Central Visayas where 21 hardware stores possessed defective angle bars. The initial culprits of the defective products are deemed to be steel importers, most notably from China.

The Philippine Iron and Steel Institute fears that the new order may lead to the influx of substandard foreign steel which will simultaneously subject local construction projects to safety issues and hinder the development of the Philippine steel industry. According to Rafael Hidalgo of SteelAsia Manufacturing Corporation, even without such order in place, Filipino-owned steel companies already face powerful traders who push for relaxed importation policies on top of countless cases of smuggling, both leading to the weakening of the local steel industry.

It is ironic that the Philippine steel industry still faces issues such as this at present when Republic Act 7103, or an act strengthening the iron and steel industry was already passed in 1991. The presence of various economic policies oriented towards further liberalization of vital and strategic industries blocks the steel industry’s opportunity to prosper.

At the immediate, the government must strengthen its regulatory functions, specifically increasing tariff and limiting import quota, to create an environment conducive for the local steel industry to flourish. The government can also undertake measures to support the local steel industry such as providing subsidies to encourage Filipinos to invest in the industry.

The government must reverse the current economic regime of liberalization and undergo a path to national industrialization. Without a plan for national industrialization that is consciously geared towards addressing local demands as its priority, coupled with a genuine agrarian reform program that will ensure raw materials for manufacturing and sufficient food for the workers, the Philippines will remain tied to answering foreign demand despite local scarcity.

For reference:

Finesa Cosico
Secretary-general, AGHAM
(02) 282 4129, 0921 312 2416

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 *Photo by Roxanne Arevalo/ABS-CBN News