Conventus Law

Conventus Law

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8 October 2021
 

Yes! In January 2020, the Department of Trade and Industry (DTI), acting on a petition filed by the Philippine Metalworkers Alliance, imposed provisional safeguard measures in the form of a cash bond amounting to PhP70,000.00 per unit of imported completely built unit (CBU) passenger cars and PhP110,000.00 per unit of imported CBU light commercial vehicles. The imposition was based on the DTI’s preliminary determination that there was “a causal link between increased imports of the products under consideration and serious injury to the domestic industry” and was supposedly necessary to “prevent further injury to the local industry which, if not addressed, would be difficult to repair”. The period covered by the investigation was 2014 to 2019 (POI). The cash bond was either (a) collected by dealers from the consumers at the time of the purchase of the vehicle in the form of a security deposit, which would be refunded to the consumers in case the measures are lifted, or (b) incorporated as part of the price of the vehicle, thereby increasing the selling price of the vehicle.
 

The Tariff Commission has recently completed its formal investigation and concluded, among other things, that: (a) there was no increase in imports of CBU passenger cars and CBU light commercial vehicles, both in absolute terms and relative to domestic production, during the POI, and (b) since such vehicles “were not imported in increased quantities during the POI… the determination of serious injury or threat thereof, causation, and unforeseen developments has become moot and academic.” Although the Tariff Commission found that imported passenger cars and light commercial cars were directly competitive with locally produced passenger cars and light commercial cars, it recommended that “no definitive general safeguard measure be imposed on the importation of the CBU passenger cars and CBU light commercial vehicles subject of the investigation.”
 
The DTI has respected the recommendation of the Tariff Commission and has stopped the implementation of the provisional safeguard measures. Dealers who collected security deposits from the consumers have also started processing the refunding of deposits to the consumers.
 
SyCipLaw TIP: A respondent in a petition for the imposition of safeguard measures may show, among other things, that there was no increase in imports over the POI, both in absolute and relative terms, that can be considered recent, sudden, and sharp. Once this is established, the Tariff Commission may consider the issue of serious injury or threat thereof, causation, and unforeseen developments moot and academic.
 

For further information, please contact:

Carina C. Laforteza, Tax Department Head,
SyCip Salazar Hernandez & Gatmaitan

cclaforteza@syciplaw.com 

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