DEPARTMENT DF

TRADE & INDUSTRY

PHILIPPINES

NOTICE OF THE INITIATION OF A PRELIMINARY INVESTIGATION ON THE

APPLICATION FOR SAFEGUARD MEASURES ON THE IMPORTATION OF
CERAMIC FLOOR AND WALL TILES FROM VARIOUS COUNTRIES
(SG CASE NO. 02-2018)

Notice is hereby given that the Department of Trade and Industry officially received a
properly documented application from the Philippine ceramic floor and wall tiles industry
for the initiation of a preliminary investigation on the application of safeguard measures
on the importation of ceramic floor and wall tiles from various countries. The protest
alleged that the increased imports· have contributed significantly to the serious injury
suffered by the local industry.

The DTI acting under Section 6 of RA 8800, the Safeguard Measures Act, has made an
evaluation of the protest and found the existence of a prima facie case that will justify
the initiation of a preliminary safeguard measures investigation on importation of
ceramic floor and wall tiles from various countries 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
covered by the investigation (POI) are the years 2013 to 2017.

An evaluation of 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, 192% in 2014 or the pre-surge level.
• in relative terms, the share of imports to domestic production increased from
4% in 2013 to 696% in 2016. In 2017, the share of imports was recorded at
600% lower by 96% to 2016 level, but higher by 572% in 2014 or the pre-
surge level.

2. that the domestic industry has suffered serious injury caused by increased imports
based on the following:
• during the POI, despite significant increases in market size, the market share
of domestic manufacturers declined from 96% in 2013 to 14% in 2017;
• the share of imported cement grew from 4% in 2013 to 88% in 2016;
• earnings before interest and taxes declined by 71 % in 2013 to 203% in 2015,
the industry experienced a sharp decline in earnings of 1,067% in 2017;
• the weighted average landed cost of imports is lower than the average selling
price of the domestic product indicating a price undercutting of 3.27%;

Enabling Business, Empowering Consumers

OFFICE OF THE SECRETARY

5/F, Industry and Investments Building, 385 Sen. Gil J. Puyat Avenue, 1200 Makati City, Philippines
Telephone: (+632) 899.7450• Telefax: (+632) 896-1166 • E-mail: secretary@dti.gov.ph
www.dti.gov.ph

\
3. that increased imports are the substantial cause of serious injury to the domestic
industry based on the following:
• significant increase in the volume of imported ceramic floor and wall tiles
preceded the serious injury to the industry from 2015 to 2017; and
• The conditions of the competition show that the market share of locally
produced ceramic floor and wall tiles was essentially displaced during the
POI as the share of imports in the domestic market significantly increased.

Further, 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: (i) whether the imposition of the provisional measure
will result in political and economic crisis: and (ii) the extent to which such
imposition will cause a shortage of a product under consideration in the
domestic markef'.

WHEREFORE, IN VIEW THEREOF, interested parties are invited 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. Submissions may be made to the
Bureau of Import Services (BIS), Department of Trade and Industry, 3rd Floor, Tara
Building, #389 Senator Gil Puyat Avenue, Makati City, within five (5) days from the
date of publication of this notice.

The non-confidential report of the study containing evidence of the DTl's findings can
be accessed at the DTI web page: https://www.dti.gov.phlmedialadvisories/12548-
notice-of-initiation-ceramic-f/oor-wal/-tiles.

20 December 2018