This was reported recently by the Federation of Philippine Industries (FPI) which has been expecting the issuance of an Executive Order (EO) reducing the tariff to one percent on raw materials not locally produced and other goods beginning this year.
According to Malacañang, the EO cannot be issued until after Congress goes on recess starting March 22.
With the two-month delay, the FPI claimed that local firms will not be able to realize the savings they had projected from the said tariff reduction.
The FPI is pushing for zero duties in order to generate significant savings from the waiver on duties of their raw and semi-processed materials.
But the Department of Finance had agreed to a tariff reduction to only one percent to cut potential losses to only P800 million compared to the P1.2 billion in foregone revenues if duties were reduced to zero.
Malacañang is supposed to issue two EOs this month. The first EO will cover goods not produce locally while the second would cover sensitive agricultural products.
The FPI has led businessmen’s demand to grant duty-free status on raw and semi-processed raw materials not available locally. The FPI claimed that the tariff adjustment–from three percent to zero–would have minimal impact on government’s income.
The FPI had sought the tariff reduction on these goods to give some relief to local manufacturers who are already reeling under high labor, power and transport costs.