RP businessmen reject plan to reduce import tariffs

RP businessmen reject plan to reduce import tariffs

MANILA (AFP): The Philippines' top business leaders yesterday rejected a government plan to reduce import tariffs to a uniform rate of five percent in six years, saying it could wreak havoc on local industries.

The businessmen told Trade Secretary Rizalino Navarro during a meeting that although they were supportive of a free-market economy, such a proposal "should be discussed more thoroughly and openly with various sectors."

Manila is proposing to reduce tariff on all imports within six-and-a-half years, or by 2001, to a single rate of five percent as part of a plan to establish a "borderless economy."

But the businessmen, led by industrialist Raul Concepcion and Ricardo Romulo, head of the Makati Business Club, said a recent survey showed 48 out of 50 industry organizations and 257 out of 319 manufacturing firms were opposed to the proposal.

"Such a move would have great implications on Philippine industry and the labor sector," the businessmen said in a position paper.

They warned that this could further expand the trade deficit and drain much-needed foreign exchange. It could also force local manufacturers to fold or encourage firms to invest abroad and export back to the Philippines.

"Another alternative would be for industry to slowly phase out of manufacturing and go into importing finished goods at low tariff rates rather than importing raw materials at the same tariff rate, only to compete with other importers of finished goods," they said.

These consequences could result to a loss of about one million jobs, they added.

They suggested that Manila first iron out problems of adjustment under the General Agreement on Tariffs and Trade and the Association of Southeast Asian Nations (ASEAN) Free Trade Area before taking other steps.

ASEAN groups Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand.