Local steel making and metal casting industries in the Philippines want the government to tax exporters of scrap metal if it cannot impose a ban on exports.
The House of Representatives committee of trade and industry has refused to recommend a ban on the export of scrap metal.
The Philippine Metalcasting Association, Inc., which was counting on a favorable House finding, said it will instead change its tack and propose the imposition of taxes on scrap metal exports.
PMAI president Antonio C. Dimaguila said the industry will die a natural death if the government does not act quickly.
In the committee report, which would be ready for plenary action today, chairman Manila Rep. Harry C. Angping argued against an export ban, saying there is no shortage of supply in the domestic market.
PMAI, an association of some 200 metalcasting companies, claims that scrap metal is the main source of raw material for local steel and metal casting industries.
With the congressional committee's report, Dimaguila said his group will instead propose the regulation of exports.
"I was thinking, we have to impose (an) export tax to level the playing field. Otherwise, the government will kill the industry," he said.
Aside from the PMAI, the Philippine Steelmakers Association (PSA) is also opposing scrap metal exports.
Cathay Pacific Steel Corp. also argued that the billet making and metal casting sectors will run short of raw material.
Industries also argued that a shortage in raw material has driven prices of domestic scrap up, threatening the viability of local operations.
Lawmakers, however, said a ban will eliminate the export market.
"It's not true that there will be a shortage in the domestic supply ... After studying their arguments, we concluded that there will be no shortage," Angping said.
"The supply would then be wholly dependent on the behavior of the local demand of scrap metal users which will create an environment conducive to monopolistic and oligopolistic practices," the committee said in its report.
However, the Philippine House Committee on Trade and Industry has discouraged the government, especially the Department of Trade and Industry, from imposing a ban or other type of measure on scrap metal.
Committee Report 971 stated that no ban on the export of scrap metals should be imposed as this could lead to a glut in the domestic market resulting to very low prices of scrap metals in the country.
Studies revealed that there is no shortage in the supply of scrap metals in the domestic market as the country generates about 600,000 tons of scrap metals or more than double than the actual maximum use of 250,000 tons.
The DTI has earlier decided to defer any action on the petition to ban the export of scrap metals pending the completion of an inquiry being conducted by the House of Representatives.
The scrap users led by the Philippine Steelmakers Association and the Philippine Metalcasting Association Inc. alleged that midstream industries like foundry industry are experiencing scrap metal shortage as dealers opt to sell their scrap abroad to command higher price. On the other hand, scrap dealers through the Scrap Collectors and Recyclers Association of the Philippines complained of low price as well as delayed payment from local customers forcing them to sell scrap metals abroad.