Unsettling steel war
Pretending there is no commercial interest behind an industry campaign seeking restrictions on competing technology would insult the public’s intelligence.
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Pretending there is no commercial interest behind an industry campaign seeking restrictions on competing technology would insult the public’s intelligence.
Something deeply unsettling is happening in the Philippine steel industry. What is being presented as a campaign against unsafe steel increasingly looks like a corporate turf war, with the machinery of the State leaning heavily on one side.
At the center are two rival blocs. The Philippine Iron and Steel Institute (PISI) has campaigned for years against induction-furnace steelmaking. The Philippine Induction Smelting Industry Association (PISIA) represents independent operators using precisely that technology.
Definitely not a public safety campaign in an economic vacuum, these are competing interests fighting over technology, regulation, and market share.
As early as 2018, PISI pushed to ban induction furnaces. The Department of Trade and Industry (DTI) did not impose a blanket prohibition, maintaining instead that manufacturers could operate provided their products complied with Philippine National Standards. That should have established a simple principle to judge the steel by — whether it met the standards, not merely which furnace produced it.
What PISI could not achieve through regulation is now being accomplished, plant by plant, through government enforcement. Induction-furnace operators now confront not merely DTI or DENR inspectors, but the PAOCC, NBI, DND, AFP, and other agencies wielding the awesome power of the State.
Davao Mighty was raided. Phil Sanjia Steel was subjected to a massive interagency operation. Chuangxing came under scrutiny.
When the companies being hit largely occupy one side of a commercial war, government owes the public something more convincing than coincidence.
This is where the controversy starts to look like cartelization. When competitors are progressively disrupted, who inherits their customers? Who benefits from reduced supply? Who acquires greater pricing power? A cartel does not become less worthy of investigation merely because government action may have facilitated market concentration.
PISI is hardly a disinterested spectator. Its prominent personalities have direct corporate connections with SteelAsia, the country’s dominant steel producer. None of this proves conspiracy. But pretending there is no commercial interest behind an industry campaign seeking restrictions on competing technology would insult the public’s intelligence.
Then there is Defense Secretary Gilberto Teodoro Jr., whose reportedly highly visible involvement raises eyebrows. Why is he personally involved in what appears to be industrial regulation? The investigative report adds an uncomfortable detail — Teodoro and SteelAsia chairman and CEO Benjamin Yao are Xavier School batchmates. School ties isn’t corruption, but when State power targets rivals, transparency is demanded.
Then came the government’s strongest argument. The recent General Santos earthquake, where authorities linked defective rebars in damaged structures to Davao Mighty Steel. For a frightened public, it was a compelling narrative.
The calendar, however, poses a problem. The Jollibee/FitMart building opened in August 1998. The Notre Dame of Dadiangas University elementary building was completed in June 2008. Davao Mighty Steel was not established until 2012.
Thus, Davao Mighty could not have supplied the steel for the buildings completed years before the company came into existence. This casts doubt on the credibility of that narrative. How can they declare someone guilty in a press release when the timeline contradicts the accusation?
If radioactive contamination exists, the government must act. Indonesia rejected 23 containers of zinc dust contaminated with Cesium-137 and returned them to the Philippines. The report says the Philippine Nuclear Research Institute identified SteelAsia as the source, while SteelAsia disputed responsibility. Doesn’t SteelAsia deserve due process, and so does everybody else?
There is also a Chinese contradiction: Chinese involvement is framed as a security concern when linked to independent competitors, yet welcomed as an economic partnership when tied to SteelAsia. The standard should be consistent.
If PISIA operators close, who gets their market? If competition contracts, who gains pricing power? These questions do not establish guilt, do they? They establish exactly why an independent investigation is necessary. The Philippine Competition Commission should examine market concentration before and after the crackdown, the communications among PISI, SteelAsia, and government agencies, and the economic beneficiaries of plant closures.
The government should open the records. Who initiated the cases? What communications occurred between Teodoro and Yao concerning the steel industry?
If steelmakers sell substandard products or break the law, they should be held accountable. Enforcement must, however, be equal — whether PISI, PISIA, SteelAsia, or Davao Mighty. The AFP and DND must serve the public, not private business interests. Government must never become a silent partner to any steel cartel.
Until the government releases the records, explains the timeline, reveals the relevant corporate ties, and shows that the law is applied equally, one question will refuse to be muted: Is the power of the State being weaponized to settle a private fight over steel?
