Product standards and ‘The Big One:’ Are we ready?

the series of earthquakes with intensities ranging from 5.1 to 6.5 magnitude that rocked mindanao and the Visayas regions recently may well justify the government’s preparations for “the Big one,” a major earthquake that could reach intensity 8.

Drop, cover and hold drills are already being done regularly by the government as part of its disaster preparedness program. However, while the drills could raise the Filipinos’ level of awareness on what to do during earthquakes, are the houses and buildings where they live ready, as well for the big temblor?

Were they made out of standard materials? What we saw of the houses that collapsed during the recent intensity 6.5-magnitude earthquake in Mindanao may have awakened our legislators that a member of the House filed a resolution, in aid of legislation, to review the country’s product standard laws and rules.

The House resolution was timely, not only because of the recent earthquakes, but also due to what seem to be “unFilipino” trade and industry policies of the government. Take, for instance, the enforcement of mandatory testing and certification of steel products.

Up to this writing, I still cannot understand why a shipment of 5,000 metric tons (MT) of imported steel bars that were unloaded at the Port of Subic were released by the Department of Trade and Industry’s (DTI) Provincial Office, through the issuance of a provisional Import

Commodity Clearance (ICC), even if only one steel bar was tested for compliance to mandatory standard.

The testing is a requirement for the issuance of ICC, which is also a customs prerequisite for the release of regulated shipment like steel bars. The rule prescribed by the Bureau of Philippine Standards to local steel bar manufacturers is to test one steel bar for every 20 MT of bars that rollout its production line.

Obviously, this is to ensure that all locally made steel bars are compliant to set standards. Can the testing, therefore, of one imported steel bar be a representative sample of a 5,000 MT shipment for compliance to Philippine standards?

Is this type of bigotry in the mandatory testing of steel bars not unfair for local manufacturers? I still cannot understand why we are so stringent in the enforcement of mandatory standard on locally made steel bars, and yet, lenient on imported bars. Perhaps, I should review the sampling methods that I learned in my statistics class in college.

To facilitate the release of the steel bars from the Port of Subic, a provisional ICC was issued by the DTI Provincial Office after testing only one bar. We, however, thank the fast action of Trade Secretary Ramon Lopez when he corrected DTI’s testing procedure, if only to be fair in its statistical method of determining the compliance or noncompliance probabilities of products to set standards.

Another case in point is the current issue regarding the reimposition of mandatory standard on glass products. Glass products, whether imported or locally made, used to be under mandatory standard, until it was amended to voluntary during the height of the port congestion in 2014, to help decongest the ports and to facilitate faster trade, without prejudice to public safety.

But when imported substandard glass started to flood the local market, the DTI issued an order reimposing mandatory testing on glass products, be it imported or locally made. But some glass importers questioned the order and filed a petition for injunction with the court to stop its implementation, and the petition was granted while the legal issue is still being resolved. In the meantime, glass importers continue to enjoy the privilege of voluntary testing for their glass imports.

But who do you think would submit their glass importation to the supposedly mandatory testing, when glass importers have the discretion to submit their glass imports to testing or not. This, indeed, is bad news for consumers and the local glass industry. Product standards are imposed principally for public safety and economic security.

In one of my meetings with Philippine Competition Commission Chairman Arsenio Balisacan, I was asked why the local manufacturers growth is stunted and is having a hard time competing with counterparts in the global economy. I told the chairman that the industry sector’s bane is because we allow substandard imported products to unfairly compete with locally manufactured goods, even in the local manufacturers own backyard or domestic market base.

How can they compete globally when even in their own base market, local manufacturers are struggling with the unfair competition posed by the unabated illegal importation of substandard goods. And all these are happening because of technical smuggling through misdeclaration, misclassification, undervaluation and under-declaration, including the government’s weak regulatory rules to protect consumers and the local economy.

This is creating unfair competition for local manufacturers in the domestic market. A big setback for local manufacturers to compete in the global market, for even in their domestic base market, they are struggling with the unabated smuggling of cheaper but lower quality imported goods, and a big challenge to the government’s disaster preparedness program. Drop, cover and hold. But will the buildings and houses hold? Who would be answerable for the lives and properties lost in disasters?

We can’t stop earthquakes from happening, but we can certainly fortify our structures to withstand them by making sure all construction materials meet the government-set standards.

Dr. Arranza is the chairman of the Federation of Philippine Industries and Fight Illicit Trade, a broad-based, multisectoral movement intended to protect consumers, safeguard government revenues and shield legitimate industries from the ill effects of smuggling.