Petrochem firms press for tariff protection under AFTA protocol

The Association of Petrochemical Manufacturers of the Philippines (APMP) urged the government yesterday to invoke the AFTA (Asean Free Trade Agreement) protocol dated Nov. 22, 2000 that effectively allows the Philippines to temporarily delay or suspend the lowering of tariffs for the petrochemical industry.

Wilfredo A. Paras, APMP chairman said the government should try to invoke the AFTA protocol immediately because time is running out as the effectivity of the AFTA scheme is only a couple of months away.

"The last meeting of the AFTA council is on Sept. 11 wherein ASEAN member-countries can ask for the exclusion of certain industries from the AFTA effectivity in June 2003," Paras said.

Paras said since government recognizes that the petrochemical industry is a strategic industry, it should do everything in its power to help the industry become competitive.

Earlier, Trade and Industry Secretary Manuel Roxas II informed the AFTA Council of the Philippines’ desire to include the petrochemical industry in the exclusion list.

The move was a concession by government to encourage existing petrochem players to go ahead with the long-delayed naphtha cracker project that would fully integrate the local petrochemical industry.

"All of the existing petrochem players are struggling to remain afloat," Paras said.

He added that "the petrochem industry cannot grow to a sustainable level if there is no change in Philippine tariff policy."

Paras pointed out that under the Board of Investments (BOI) Petrochemical Industry Master Plan, it was recognized that tariff protection is a critical factor in the viability of the industry.

The petrochem industry produces the raw materials for the production of plastic products.