Iron and Steel
The Philippine iron and steel industry is a critical component in achieving inclusive economic growth and sustainable development. The industry provides necessary inputs for the construction of infrastructure, power generation and distribution, transportation facilities and vehicles, manufacturing machinery and equipment - all of which are vital for a nation’s long-term growth. The industry’s outputs are utilized by both commercial and industrial enterprises, such as electronics, appliance manufacturing, and shipbuilding, among others.
The Philippine iron and steel industry aims to contribute to the country's sustainable development by manufacturing world-class products for the industry and society, and sees itself as a majority producer of high-quality and safe steel products for domestic users by 2030. This is achieved when the industry is able to supply 70% of the tonnage of required apparent steel consumption.
To achieve this, the industry recommends the implementation of measures that would reduce the costs of importing raw materials and losses of revenue due to unfair competition; reduce electricity costs; reduce logistics costs; encourage investment in the industry; enlarge the pool of workers for the industry; make the sector more attractive for local and foreign investors through ISO accreditation; answer the need for a set of consistent and timely delivered industry data; complement the implementation efforts of the BOC and DTI provincial standards monitoring teams; and help companies upgrade their capacities continuously.
01
About Iron and Steel
The Philippines sits on vast reserves of minerals, both metallic and non-metallic. Aside from gold and copper, the country is also rich in iron ore reserves of almost 300 million metric tons. To further promote investments in the mining of metals, the Philippine government allowed 100 percent foreign ownership of large-scale mines (subject to certain terms and conditions) in the hope of attracting quality operators and ensuring a steady output of metals.
The rapid development of the Philippines and continuous growth of the Southeast Asian region has resulted in higher demand for iron and steel products domestically and regionally. The Philippine economy has been performing beyond expectations over the past years, growing from 5.1% in 2011 to 6.8% in 2012, and to 7.2% in 2013. In this unprecedented growth, the construction sector is a major contributor driven by demand for private residential and office buildings and infrastructure spending by the government, which led to an upswing in demand for steel products. From 2010 to 2013, the country’s apparent steel consumption (ASC) increased from 4.1 to 6.6 million metric tons — a consumption growth of 61% in three years.
Philippine-based iron and steel manufacturers have expanded their production capacities in the long products sector, but still fall short of domestic demand, mainly because of the absence of an integrated steel mill (ISM). The flat products sector has no local production of hot rolled coils (HRC), hot rolled plates (HRP), and cold rolled coils (CRC), and all are currently imported. The availability of raw materials (i.e. iron ore) and semi-processed products (i.e. pig-iron) presents the opportunity for local iron and steel manufacturers to domestically source their input requirements and, more importantly, the possibility of establishing an ISM.
Investing in the Philippines will provide iron and steel manufacturers better access to other ASEAN-member countries, which includes the big steel markets of Indonesia, Malaysia, Thailand, and Vietnam. The establishment of the ASEAN Economic Community (AEC) in 2015 will further facilitate the free flow of commodities across the region, including iron and steel.
02
Facts and Figures
Steel product lines locally produced
- Semi-finished products: billets
- Finished long products:
- Reinforcing steel bars (all sizes)
- Angle bars – 80mm and below
- Light sections, channels and shapes
- Steel wires
- Steel purlins
- Finished flat products:
- Hot dipped galvanized sheets
- Zn-Al coated sheets
- Welded black iron pipes and tubes
- Welded galvanized pipes and tubes
- Pre-painted galvanized / Zn-Al coated coils and sheets
- Pre-painted galvanized iron
Apparent Steel Consumption (ASC), 2007-2012*
| Particulars |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
| Billets |
1,744,265 |
1,554,497 |
1,941,799 |
2,219,998 |
2,311,252 |
2,543,855 |
| Slabs |
319,079 |
250,139 |
64,286 |
0 |
8,759 |
0 |
| Long Products |
2,201,216 |
2,179,056 |
2,263,840 |
2,774,510 |
3,123,520 |
3,851,836 |
| Flat Products |
2,101,690 |
2,032,120 |
1,646,936 |
1,748,877 |
2,517,381 |
3,180,740 |
| Long and Flats Total |
4,302,906 |
4,211,176 |
3,910,776 |
4,523,387 |
5,640,901 |
7,032,576 |
*In metric tons. | Sources: BOC, DTI, PISI, SEAISI, and industry sources
Trade Performance, 2004-2012*
|
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
|
| Exports |
92 |
162 |
346 |
220 |
151 |
74 |
105 |
44 |
0 |
| Imports |
2,867 |
2,721 |
3,077 |
3,433 |
3,018 |
2,830 |
3,148 |
3,922 |
4,684 |
*In ‘000 metric tons. | Source: SEAISI
03
Roadmap
04
Policies
IPP 2014-2016
The manufacture of basic iron and steel products, steel grinding balls, long steel products (billets and reinforcing steel bars), and flat hot/cold-rolled products is among the preferred list of activities in the IPP.
All iron and steel products must be compliant with the applicable Philippine National Standards (PNS).
BPS Product Certification Scheme
The DTI’s Bureau of Product Standards lists certain iron and steel products as among the products for mandatory certification under mechanical/building and construction materials.
The certification of iron and steel products are guided by the Philippine Standard (PS) Quality and/or Safety Certification Mark Scheme and the implementing guidelines for the mandatory certification of rerolled steel bars, deformed steel bars, equal leg steel angle bars, steel wire nails, low carbon steel wires, and BI/GI steel pipes.
Imports of steel products must undergo the Import Commodity Clearance (ICC) certification scheme, through which ICCs are issued to importers whose shipments have been found to conform to the requirements of the relevant Philippine National Standards or acceptable international or foreign standards.
PNS for Iron and Steel Products
There are mandatory Philippine National Standards covering ferroalloys, metals, and steels and equal leg angle bars.
05
Programs
Industry Development Program
The iron and steel industry technical working group (TWG) conducts meetings to discuss and address industry concerns and issues. It includes representatives from the BOI, Philippine Iron and Steel Institute, other government agencies (such as DOST-PCIEERD, BOC, TESDA, and DOE), and other concerned stakeholders.
Among the matters covered by the TWG are the following:
- Implementation of short-term, medium-term and long-term actions that will address the horizontal and vertical issues of the industry for a more conducive business environment
- Component studies that will provide guidelines in the establishment of an integrated steel mill (ISM)
- Bench scale metallurgical testing of domestic iron ore
- Program to address smuggling, tariff distortion, logistics, infrastructure and power costs
- Revival of existing steel capacities
- PPP projects
06
Champions
Philippine Iron and Steel Institute (PISI)
Room 509, Cityland Shaw Tower,
Shaw Blvd., Mandaluyong City, Philippines
Tel. No.: (632) 631-0773
Telefax: (632) 636-5263
Email: pisi@compass.ph
Board of Investments (BOI)
Industry and Investments Building,
385 Senator Gil Puyat Ave,
Makati City Philippines
Tel. No.: (632) 897-6682 loc. 237
Email: RDLignes@boi.gov.ph
