MAKATI – Department of Trade and Industry (DTI) Secretary Ramon Lopez committed to investigate the presence of substandard steel in the market. He also said that DTI is adding more products for mandatory certification to make sure that substandard construction materials will not endanger people’s lives.

The response was made in reaction to House Resolution 379 that called for an investigation on the alleged proliferation of substandard steel and cement products, considering the damage left in the wake of the recent earthquakes in Mindanao.

“We welcome this call and shall fully cooperate and support the investigation to be conducted in order to ensure that the public will not be harmed by substandard construction materials,” the trade chief said.

“In fact, under President Duterte’s administration, DTI has made stricter the rules on standard compliance,” Lopez added.   “We are including more products in the list of mandatory compliance and have even increased the sample size of products to be tested.”

“We are adding more products in the mandatory compliance since many of them were released from the list. And since they are not subjected to mandatory testing, substandard products can come in,” the trade chief said.

For regulated steel products, such as rebars and angle bars, DTI has placed stricter standards and intensified monitoring and enforcement for both imported and locally-manufactured products.

Some of these new guidelines include increasing the sample size for product testing, checking the Philippine Standard mark (PS) and standards of local manufacturing plants, and inspections at different stages of transport, such as pre-shipment, post-shipment, and audit in retail.

An article in the Manila Times, published on 5 November, said that the resolution’s authors “wanted to get to the bottom of the alleged collusion between large steelmakers and some corrupt officials of the DTI and Bureau of Customs.”

For his part, Sec. Lopez said that while the allegations run counter to the agency’s goal to protect consumers and strengthen local manufacturing industries, DTI shall intensify the drive to continue the investigation to ensure that there’s no corruption in the system.  He also would encourage third-party investigations, such as those led by the Presidential Anti-Corruption Commission (PACC).

“We heightened the campaign against substandard products because it is not safe for consumers and unfair to local manufacturers who will face cheap competition. This, in turn, may shrink the country’s manufacturing base and lead to job losses. Clearly, smuggling substandard steel is detrimental to the mission of the agency,” he added.


Intensified monitoring and enforcement

Sec. Lopez noted that DTI has intensified its monitoring and enforcement activities for steel products. For 2019 alone, the DTI-Fair Trade Enforcement Bureau has issued 61 Notices of Violation against erring establishments found distributing non-conforming steel products.

Likewise, the DTI-Bureau of Philippine Standards (BPS) has intensified its factory surveillance activities and created composite teams conducting surprise factory surveillance audits.

In the last two months, DTI-BPS has conducted 14 factory visits involving 19 PS Licenses for steel products. During these visits, samples were randomly drawn and submitted to the Metal Industry Research and Development Center (MIRDC) testing laboratory for independent testing.

As a result, DTI-BPS has suspended two PS licenses of factories found producing non-conforming steel products. A total of 57,250 pieces of non-conforming steel bars with an estimated value of PhP6.5 million were likewise destroyed.

In total, the team conducted 52 factory surveillance audits with 8 more factories due for surveillance and/or surprise audits within the year.

Since 2017, the DTI has also implemented stricter technical regulations both for locally manufactured and imported cement products. All cement imports are subjected to regular verification and critical testing on a per shipment, per bill of lading basis while regular surveillance activities are likewise conducted for local manufacturers.

“DTI shall continue protecting consumers by ensuring the quality and safety of critical construction materials, not only for steel and cement. Currently, consultation processes are ongoing with regard to the draft technical regulations for plywood, ceramic tiles, roofing, and BI/GI pipes. Also, technical regulations for all glass products have been issued but are yet to be implemented due to the writs of injunction separately issued by the Makati and Pasay regional trial courts,” said Sec. Lopez.

“In the pipeline are the technical regulations for all hollow block products. Draft technical regulations will be prepared, and stakeholders’ consultations will be conducted within the month,” he added.


Stricter standards for steel

Regarding regulated steel products, such as rebars and angle bars, DTI-BPS has initiated a review of its technical regulations since 2016. Since then, the agency has issued one Department Administrative Order (DAO) and two Memoranda Circulars (MCs) implementing stricter technical regulations for steel products.


Some of the new provisions include:

  1. Increasing the sampling size for product testing from three pieces, regardless of quantity produced or imported to a minimum of five pieces to as high as 200 pieces for 200,000 MT steel bars, or more depending on the actual quantity to be certified;
  2. Increasing the surveillance for foreign-based manufacturers, requiring regular surveillance on a per importation, per shipment, per bill of lading basis;
  3. Conducting regular annual surveillance and surprise factory or warehouse visits and sampling for local manufacturers;
  4. Increasing the amount of surety bond from PhP150,000, regardless of import value to 10% of the total invoice value of the imported products;
  5. Increasing the minimum capitalization for importers to PhP20 million, to ensure that only legitimate and capable businesses import steel products;
  6. Implementing the mandatory embossed marking for Quenched/Tempered and Micro Alloy rebars including steel grades to properly guide the consumers/users on the types of bars available in the local market; and,
  7. Requiring steel manufacturers to set-up individual testing capabilities for mechanical and chemical tests prior to the issuance or renewal of their PS License, to ensure that the steel products are regularly tested in-plant.

Date of Release: 11 November 2019