Plastic makers challenge petrochem firms to prove their losses

The Philippine Plastic Industry Association (PPIA) dared yesterday the three petrochemical firms to present their audited financial statements to prove that they are losing money and, thus, deserve tariff protection.

Alfred Chan, PPIA executive secretary, said that the three petrochemical companies may be losing money because of their interest payments and over-investment in their productive capacity.

"If the petrochemical firms are given tariff protection, the government will be creating another cartel," Chan warned.

He said the three petrochemical firms made a mistake in putting up oversized capacity and are now asking consumers to pay for their excess capacity.

"The consumers should not subsidize the wrong business decision of the three petrochemical firms," Chan said.

He added that "the petition submitted by the three petrochemical firms is a shotgun approach devoid of any serious study of its implications to the end users."

Chan also said the petrochem firms are also seeking a tariff hike for other raw materials such as ethylene-vinyl acetate which is used to produce rubber sandals and is not produced locally.

"Ethylene-vinyl acetate is currently subject only to one percent tariff,"

Chan expressed surprise why such a raw material is included in the petition of the petrochem firms. — Marianne Go