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.