Technological Institute of the Philippines

CONTRIBUTION
TO THE
PHILIPPINE
ECONOMY

CONTRIBUTION TO THE PHILIPPINE ECONOMY

 Technological Institute of the Philippines

The chemical manufacturing industry is considered as one of the pillars in the

Philippine economy as it supports a majority of the industries in the country namely:
agriculture, food, pharmaceutical, services, and manufacturing. The various chemical
sub-sectors include petrochemicals, oleo-chemicals, coatings and inks, adhesives,
plastics, fertilizers, cosmetics and personal care, soap and detergent.

According to an article by WordPress, sodium tripolyphosphate (STPP) is used

in a wide range of applications in the manufacture of cleaning products and food
preservatives as well as in water treatment facilities. PhosPH Corporation contributes
in the Philippine economy by becoming an active contributor in its steady growth
through its operations since sodium tripolyphosphate is a component of most
detergents. In 2005, the increasing prices of locally manufactured sodium
tripolyphosphate poses threat to the sustainability of multinational detergent
manufacturing giants like P&G, Unilever, Peerless and ACS.

PhosPH Corporation will address the Philippine economic problem as featured

in PhilStar newspaper stating ChemPhil, in its protest, claimed that there was an urgent
need to impose safeguard measures considering the massive losses and grave
difficulties being encountered by the domestic STPP industry due to the surge in the
importation of STPP. ChemPhil stated that imported STPP began causing injury in
2001, continuing to 2005 despite the extension of the definitive anti-dumping duty
imposed on imports from China. ChemPhil is the only STPP producer in the country
of sodium tripolyphosphate, the largest cost component in the production of
detergents, or around 25 percent of production cost as a water softener or conditioner.
According to the DTI, it found that increased imports of STPP have caused serious
injury to the domestic industry, particularly in terms of declining market share,
domestic sales, capacity utilization, production, profitability, productivity, price
suppression, and undercutting. PhosPH Corporation can produce STPP that will
provide readily available supplies that will increase the productivity and labor to

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produce goods. Table 16.1 gives the total import data of sodium tripolyphosphate
showing a surge of import from 2006-2012.

Table 16.1 STPP Import Data (PSA)

Year Total Import (kg)

2006 12,941,440

2007 9,486,338

2008 11,048,360

2009 9,428,089

2010 10,029,634

2011 6,735,494

2012 10,210,877

2013 4,925,666

2014 4,701,217

2015 4,970,301

The production of sodium

tripolyphosphate of PhosPH Corporation can be a resolution on to the threat that might
happen on the possible closing down and migration of detergent companies such as
P&G if their manufacturing rate for the detergents were not achieved due to a loss of
STPP affordable supplies. It is a decision that would not only mean a loss of thousands
of jobs but also send another bad signal to the foreign investment community
considering P&G’s influence in world business.

CAWC Inc. is the pioneer and sole manufacturer of technical grade sodium tri-
polyphosphates (STPP)for the Philippine detergent industry that is now causing

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prohibitively higher prices of STPP. They were pricing $806.39 per ton while the
imported price was only $635.06 per metric ton. PhosPH Corporation will be the way
out on the monopoly of sodium tripolyphosphate.

The company will also help improve the employment rate of the Philippine
economy. On the sectorial analyses of a government website, it was stated that the
overall performance and contribution to economy of the manufacturing industry has
been weak and declining for the past two decades of the Philippines. Employment for
the qualified Filipino citizen which may or may not reside in the CALABARZON
region or near the plant location will be served by PhosPH Corporation, addressing the
concern on the report of contributing into the labor force instead of being unemployed
or underemployed. The statistics were conducted by the Bureau of Labor and
Employment Statistics (BLES) that the chemical industry employs a total of 176,000
employees as of July 2013. The Samahan sa Pilipinas ng mga Industriyang Kimika
(SPIK) provided industry estimates on the number of direct workers for the following
sub-sectors: petrochemicals–3,000 direct workers; oleo-chemicals–3,000 direct
employees; and the chlor-alkali sector–600 direct employees.

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