Petrochem industry frustrated over DTI’s inaction

Petrochemical industry players are getting frustrated with Trade and Industry Secretary Manuel Roxas II’s failure to prioritize negotiations for the delay of the implementation of the Common Effective Preferential Tariff (CEPT) for petrochemical products.

The CEPT is scheduled to take effect by 2003, at which time all tariffs within the ASEAN region will drop to zero-five percent.

The local petrochemical industry is seeking a little more time for continued tariff protection until it can set up a local naphtha cracker plant which would be able to produce the basic raw material for local plastics manufacturers.

Industry sources said government has to follow a certain protocol in requesting for a delay in the implementation of the CEPT.

First and foremost, the Philippine government has to formally request for a delay during a formal meeting of the ASEAN members.

The next formal meeting of the ASEAN ministers is scheduled sometime in the third quarter of this year.

However, a senior ASEAN economic ministers meeting is scheduled this month in Bangkok, Thailand, and according to sources, the Philippines can make a formal request for the delay of the implementation of the CEPT for petrochemical products.

After a formal request has been made, the Philippines still has to go into bilateral negotiations with individual member countries of ASEAN.

While petrochem industry players admit that the naphtha cracker projects is delayed, they point out that government should not allow the existing industry to perish especially if the market is fully opened to ASEAN competitors who are already more advanced.