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.