ORDER

The Department of Trade and Industry (DTI) initiated a preliminary investigation to determine whether increased imports of ceramic floor and wall tiles is causing or threatening to cause serious injury to the domestic industry. The products covered by the investigation are classified under AHTN Codes 6907.2123, 6907.2124, 6907.2193, 6907.2194, 6907.2213, 6907.2214, 6907.2293, 6907.2294, 6907.2313, 6907.2314, 6907.2393, 6907.2394 and 6907.4092. The period of investigation (POl) are the years 2013 to 2017. Updated data for 2018 were also presented.

Pursuant to Section 7 of the Safeguard Measures Act (RA 8800), “x x x the Secretary shall, on the basis of the evidence and submission of the interested parties, make a preliminary determination that increased imports of the product under consideration are a substantial cause of, or threaten to substantially cause, serious injury to the domestic industry. x x x”

A review of the evidence made available to DTI shows:
1. that the volume of imports of ceramic floor and wall tiles

• in absolute terms, increased from 2013 to 2016. In 2017, imports are lower by 13% over the 2016 level, but higher by 2,170% in 2014 or the pre-surge level.
• in relative terms, the share of imports to domestic production increased from 4% in 2013 to 641% in 2016. In 2017, the share of imports was recorded at 549% lower by 92% to 2016 level, but higher by 523% in 2014 or the pre-surge level. In 2018, share of imports was recorded at 542%, lower by 7% to 2016 level, but higher by 516% in 2014.2. that the domestic industry has suffered serious injury caused by increased imports based on the following:

• during the POl, despite significant increases in market size, the market share of domestic manufacturers declined from 96% in 2013 to 15% in 2017 and 2018;

• the share of imported ceramic wall and floor tiles grew from 4% in 2013 to 87% in 2016;
• earnings before interest and tax exhibited a declining trend of 71% in 2014, a sharp decline of 203% in 2015 when the operations resulted to loss, an increase of 92% in 2016 which means that there was an improvement in operation compared to 2015 but the industry remained at loss. In 2017, the industry’s operation continued to exhibit losses with the highest decline of 1,067% and further decline of 157% in 2018;3. that increased imports are the substantial cause of serious injury to the domestic industry based on the following:
  0. c industry”, provisional safeguard measures in the form of a cash bond amounting to ,P3.00/kg shall be imposed on imported ceramic floor and wall tiles classified under AHTN Codes 6907.2123, 6907.2124, 6907.2193, 6907.2194, 6907.2213, 6907.2214, 6907.2293, 6907.2294, 6907.2313, 6907.2314, 6907.2393, 6907.2394 and 6907.4092 for a period of 200 days from the date of issuance by the Bureau of Customs (SOC) of the relevant Customs Memorandum Order (CMO) or fifteen (15) days after the publication of the DTI Order in two (2) newspapers of general circulation, whichever comes earlier.Imports originating from developing countries listed in Annex A covered by Rule 8.8 of the IRR of RA 8800 shall not be subject to the provisional safeguard measure.

Also, unglazed , porcelain , mosaic, and marble tiles are excluded from the investigation since they are not produced locally. Further, the preliminary investigation excluded glazed ceramic tiles imported from the European Union since said tiles do not compete with locally produced tiles.

Importers of ceramic floor and wall tiles originating from a country that is exempt from the provisional safeguard duty shall submit a Certificate of Origin (CO) issued by the authorized agency/office in the source country of manufacture authenticated by the Philippine Embassy/Consulate General.

Moreover, Rule 5.2 of the Implementing Rules and Regulations (IRR) of RA 8800 provides that “the Secretary when establishing that the application of a safeguard measure will be in the public interest shall take into consideration the following factors; among others: x x x (ii) the extent to which such imposition will cause a shortage of a product under consideration in the domestic markef’.