RP won't seek tariff concessions: Roxas

RP won't seek tariff concessions: Roxas

MANILA (CNI): The Philippines will not ask the Association of Southeast Asian Nations (ASEAN) for the continuation of current tariff rates on petrochemical products until a deal to build the country's first naphtha cracker has been formalized, CNI learned on Tuesday.

The Philippines government, through its subsidiary the Philippine Petrochemical Development Corp, signed an agreement with 11 local and foreign firms to discuss details of a shareholding contract for the cracker last year.

Trade Secretary Mar Roxas said: "We would not want to approach our ASEAN neighbors for any type of concession unless this (naphtha project) becomes real," adding that the signing of the agreement was six months behind schedule.

Roxas said the government was ready to support the naphtha project, but also voiced concerns that the would-be partners themselves "might have difficulties formalizing their consortium" because of the glut in Asian markets.

ASEAN is implementing a Common Effective Preferential Tariff (CEPT) program, which calls for tariff reductions in key industries. The promoters of the Philippines' naphtha cracker have urged the government to keep a 15 percent tariff on polyethylene (PE) and polypropylene (PP) imports until 2010.

They have also lobbied for the imposition of a 5 percent import tariff on olefins once the cracker starts commercial operation.

The proposed cracker will have a capacity of 600 000-700 000 ton/year and is expected to come on stream by mid-2004 or 2005. It will provide raw materials for the country's PE and PP plants.