We can only brace for the inevitable

The vestiges of tariff protectionism are slowly crumbling and falling like dominoes one after the other. There was the Caltex refinery that ceased its refinery operations to gear up to be just a depot of sorts for their products that would be more viable if imported. Then there was also Shell’s base oil refinery in Pililia, Rizal that shut down simply because the deluge of imported base oil products made its operations untenable.

The Tabangao refinery of Shell may not be far behind from closing shop. It will all depend on whether the environment for refinery operations in the country would remain acceptable–coming no less from Mr. Ed Chua, current country chairman of Pilipinas Shell. Of course the very young-looking chief executive of one of the country’s major players in the oil industry was quick to add during our conversation that they are constantly working to make such environment constantly acceptable.

However, the possibility looms, as the least of emotions or sentimentality would be involved in making the decision to "bring down the shutters". As soon as a scenario develops where a sustained operation of the Batangas refinery would prove inimical to the business interests Shell, we should all expect the operations to cease.

It has to be understood though that the "acceptable environment for refinery operations" does not only involve the prospect of having government intervention by way of tax incentives or any form of tariff-protection. Ed also explains that an important factor in such environment is the refining operation’s economies of scale. As it is there are huge refining capabilities in other parts of the region, which can bring down refinery costs and improve margins. And that makes the Tabangao refinery’s survival more tentative.

We can only pray for the best as we expect the worst.

All these are part of the changing times. Although much of the developed countries are hurrying it up for their own vested interests, globalization is indeed going to be a fact of life. What we can just do as a developing country is to try our best to postpone to the longest time possible the implementation of tariff-less trade but in the process gear ourselves up for the big battle with the "big boys" that looms ahead.

We should not look at tariff protection, for as long as it can last, as a means to survive in our business but as a means to build our business in order to compete worldwide as globalization sets in.

Mr. Raul Concepcion was so candid about it in a recent conversation. Ronnie was saying that the problem with most of the businesses that now cry for further tariff protection in order to survive was their failure to gear up for this scenario, which has been developing right before the eyes of every businessman in the past decade.

The signal to gear up or to pack up was when our government was already left with no choice but to ink agreements with the WTO for the scaling down of our tariffs. Of course it cannot be discounted that many businessmen really decided to pack up their earnings and let their businesses just linger on as they were and howl for help when the going gets rough and just pray for results. And I guess that’s actually the scenario now.

Changing Of The Guard

Mitsubishi Motors Philippines Corp. (MMPC) will have a new president in the person of Mr. Kengo Takase. This will be officially announced on Feb. 2 during cocktails at the Makati Shangri-La, an occasion to also bid farewell to the outgoing president Mr. Teruhiko Shibata.

This could also be an opportune time for MMPC to raise their glasses for their being the 2nd top sales grosser in the local automotive industry for 2003.

Cheers to Shibata-san, Mel Dizon and Froy Dytyanqin and the men and women of Mitsubishi Motors Philippines for the sales feat and cheers to welcome Takase-san.

‘Come Back Kid’

He is no neophyte in the august halls of the Philippine Senate – he was there for 12 years. Nor is he a novice in the executive branch of government – he served as the Secretary of Defense under two presidents until he resigned on matters of principle.

Orly Mercado is doing a comeback as a senator. We shall have him on Breaking Barriers (IBC TV-13, 11 p.m., Wednesdays) this week. My brother Rey and I shall try to break barriers with this one-time UP activist and my fellow disc jockey and announcer in the good old Channel 7 of Bob Stewart days. We hope to get some insights into the country’s state of affairs and his views on present political affairs and other concerns.

"Was he really a willing participant in EDSA Dos turning his back on his president and friend, ERAP?"

This is just one of the many intriguing questions that we shall ask Orly this Wednesday night. Don’t fail to watch.

Mabuhay!!! Be proud to be a Filipino.

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