Petrochem group defends call for tariff protection

The Association of Petrochemical Manufacturers of the Philippines (APMP) defended yesterday its call for tariff protection by pointing out that the domestic petrochemical industry provides a boost to the economy with investments over the last five years amounting to P50 billion.

"The investment in the domestic petrochemical industry has certainly been a boost to the economy and has provided employment and income opportunities to many Filipinos," APMP chairman Willie Paras said yesterday.

The local petrochem industry provides employment for about 250,000 Filipinos.

The industry is asking the government to raise anew the existing 15 percent tariff on resins to 30 percent, a hike which is being opposed by local plastic product manufacturers.

"There is a need for government to provide the necessary framework for the industry to progress such as imposing higher tariffs and assisting in the development of a naphtha-cracker plant that is essential in the production of petrochemical products," Paras explained.

He said the Philippines imposes a mere 15-percent tariff on polymer resins, compared to tariffs ranging from 25 percent to 40 percent imposed by Taiwan, South Korea, Japan, India, Thailand, Malaysia and Indonesia.

However, local plastic products manufacturers counter that Indonesia and Thailand are set to bring their tariff on resins to five percent by next year.

Most other Asian countries, local plastic products manufacturers claim, impose tariffs on resins ranging from 10 percent to 15 percent.

However, the APMP argued that Taiwan, South Korea, Japan, India, Thailand, Malaysia and Indonesia already have a mature and integrated petrochemical industries and they have been exporting their excess output of resins and plastic products.