The Bureau of Customs (BOC) is set to enforce safeguard duties on imports of high-density polyethylene (HDPE) pellets and granules for the second consecutive year in the Philippines. The BOC Management Information System and Technology Group (MISTG) officer-in-charge deputy commissioner, Kriden Balgomera, outlined the definitive safeguard duty in MISTG Memo No. 03-2024 dated January 10, indicating that the duty, amounting to P1,271 per metric ton (MT), was incorporated into the BOC's Electronic-to-Mobile (E2M) System on January 11.

This enforcement aligns with Customs Memorandum Circular (CMC) No. 172-2022, which disseminated the Department of Trade and Industry (DTI) Department Administrative Order (DAO) No. 22-13. Issued on September 30, 2022, DAO 22-13 mandates a three-year safeguard duty on HDPE pellets and granules to safeguard the local HDPE industry from serious injury. The order came into effect with the issuance of BOC Customs Memorandum Order (CMO) 02-2023 on January 11, 2023.

The initial safeguard duty of P1,338 per MT for the first year was introduced into the BOC's E2M System on December 17, 2022. Subsequently, the duty is expected to decrease to P1,208 per MT in the third year of implementation. The safeguard duty is applicable to HDPE falling under the Association of Southeast Asian Nations Harmonized Tariff Nomenclature (AHTN) 2017 Code 3901.20.00.

HDPE, a key material in the production of plastic bottles, corrosion-resistant piping, geomembranes, and plastic lumber, plays a vital role in various industries. The safeguard measure excludes certain products, such as polyethylene (PE) wax, ethylene acrylic acid copolymer, polypropylene, low-density polyethylene, and polyethylene terephthalate resin.

Notably, HDPE grades tailored for wire and cable jackets or coatings, along with those used in rotational molding processes, are exempt from the definitive safeguard measure. Importers of HDPE from exempt countries must submit a Certificate of Country of Origin issued by the authorized agency/office in the source country, authenticated by the Philippine Embassy/Consulate General, where applicable.

DAO 22-13 was formulated based on the recommendation of the Tariff Commission (TC) following a formal investigation. The TC found an imminent threat of serious injury and significant overall impairment to the domestic HDPE industry. The surge in HDPE imports in 2021, coupled with a high likelihood of increased future imports, prompted the need for a safeguard measure.

The TC emphasized the need for a level playing field to enable the local HDPE industry to compete with imports, expand manufacturing capabilities, and generate employment opportunities. Importers and users of HDPE pellets and granules will still have the option to choose between local and imported products, and the imposition of the safeguard measure is not expected to cause shortages in the domestic market.

The DTI initiated the formal investigation following a request in September 2021, aiming to determine the merits of imposing a definitive safeguard measure on HDPE imports. This request followed a preliminary investigation prompted by allegations from JG Summit Petrochemical Corp. (now JG Summit Olefins Corporation) in 2020, claiming that increased HDPE imports caused serious injury to the domestic industry. JG Summit Olefins Corporation currently accounts for 100% of the total domestic production of HDPE.