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The Department of Trade and Industry is initiating a preliminary safeguards investigation on imports of corrugating medium
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The probe will determine whether increased imports of the commodity is causing serious injury to the domestic industry
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Two members of the Pulp and Paper Manufacturers Association of the Philippines applied for safeguard measure application, prompting the preliminary investigation
The Department of Trade and Industry (DTI) is initiating a preliminary safeguards investigation to determine whether increased imports of corrugating medium is causing serious injury to the domestic industry.
In notice dated February 11 and signed by Trade Secretary Ma. Cristina Roque, DTI invited interested parties to submit their comments and position on the matter, including their views on whether the imposition of a safeguard measure is in the public interest.
Corrugating medium is the fluted portion of the corrugated board placed in the middle of two liner boards providing stacking strength and impact protection. Locally produced corrugating medium are made from 100% recycled paper and converted into corrugated boxes which protects products from possible damage during shipment and storage.
The corrugating medium covered by the investigation is classified under Association of Southeast Asian Nations Harmonized Tariff Nomenclature Codes 4805.19.10, 4805.19.90, and 4805.12.00 from various countries.
The preliminary investigation is pursuant to Republic Act No. 8800, or the Safeguards Measures Act, which states that the trade secretary may initiate a preliminary safeguard investigation if there is evidence that increased imports of the product under consideration are a substantial cause of, or are threatening to substantially cause, serious injury to the domestic industry.
The preliminary investigation stems from the applications of safeguard measure last year by two members—supported by other members—of The Pulp and Paper Manufacturers Association of the Philippines that alleged that the increased imports of corrugating material have contributed significantly to the serious injury suffered by the local industry.
In an evaluation report dated February 11, DTI said it found prima facie evidence to motu proprio initiate and conduct a preliminary safeguards investigation to determine whether corrugating material is being imported into the Philippines in increased quantities and is causing serious injury to the domestic industry.
The report said there was a significant increase in the volume of imports both in absolute terms and relative to domestic production from 2019 to 2023. In 2023, imports grew 77% to 89.311 metric tons (MT) and increased 104% year-on-year to 92,955 MT in the first half of 2024.
Share of imports also represented a significant share proportionate to production from 2019 to 2023. In 2023, the share of imports relative to production rose to almost 85%. While domestic production increased by approximately 2%, imports surged by 77%, outpacing the growth of production.
The market share of the domestic industry also plunged to 54% in 2023, as sales declined by 2%, while imports captured 46% of the market.
Despite a 24% increase in consumption demand and plant expansions in 2022, the domestic industry was able to take advantage of the market growth, the report added.
Moreover, the report said the industry “suffered loss of market share, declining domestic sales, utilization rate, reduction in labor productivity, and incurred losses.”
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