Philippines urged to lower tariffs
Philippines urged to lower tariffs
MANILA (AFP): The Philippines should lower its tariffs even
before the other members of the Association of Southeast Asian
Nations (ASEAN) to force its industries to be more competitive,
Economic Planning Secretary Cielito Habito said here.
Habito also said the fall in the inflation rate to 7.8 percent
in October would enable the Philippines to ask the International
Monetary Fund (IMF) for a more relaxed monetary program in future
negotiations.
Speaking before a forum of local industrialists, Habito said
Friday he foresaw the country's present four-tiered tariff
structure, ranging from three to 30 percent, being replaced by
uniform tariffs of three and 10 percent by the year 2003.
"The faster we are able to go down to a lower rate, the faster
we are able to reach better cost-effectiveness and the faster we
can be more competitive than our ASEAN neighbors," he told
businessmen.
Under the existing ASEAN Free Trade Area (AFTA) program,
ASEAN, which includes Brunei, Indonesia, Malaysia, Singapore,
Thailand and the Philippines, will gradually lower their tariffs
until they have a free trade zone between them by the year 2008.
He expressed confidence that Philippine products could become
more competitive than those of their neighbors even if the
protection they received from tariffs was reduced.
At the same forum, Habito said the country's success in
bringing its inflation rate down to 7.8 percent in October from
8.6 percent in September showed that it "need not be taken to
task for having exceeded monetary targets."
He was referring to the country's failure to stay within
ceilings imposed by the IMF as part of a three-year, US$684-
million credit program it sealed with Manila this year.
"Experience has demonstrated that even after exceeding
monetary targets, we are still able to bring down inflation so we
can still proceed with a lax monetary program," Habito said.
The IMF has been pressing the Philippines to implement reforms
aimed at reducing inflation by lowering the money supply and
shrinking the deficit but the Finance Department admitted this
week, it was seeking the postponement of some of the reforms
including new taxes and deregulation of oil prices.