The EO is being awaited by the downstream plastics industry since November after the plastics manufacturers were able to successfully convince the Cabinet-level Tariff and Related Matters (CTRM) that there is no continued justification for the maintenance of high tariff rates on the intermediate plastic resins.
JG Summit Petrochemical Corp., the lone operating petrochemical manufacturer which produced plastic resins, for at least five years has been able to convince the government to maintain the high tariff cover on the intermediate plastic resins on the still unrealized operation of a naphtha cracker plant.
Because JGSPC has not been able to fully supply the raw material requirement of the downstream plastics manufacturers and the importation of the needed resins has become expensive, the plastics industry saw a drop in consumption of resin in 2004 of 166,402 metric tons.
Estimated losses to the government from the plastics industry in 2004 due to the non-payment of duties and value added tax payments, withholding tax, SSS-Philhealth and Pag-Ibig contributions, the three percent VAT on gross sales and income tax payments is P3.837 billion.
The EO had been transmitted to Malacañang in November and is still awaiting the signature of President Arroyo.
Once the EO is signed, the meter on the Philippines’ compensation to Singapore would also stop.
The Philippines is paying Singapore compensation for its request not to lower the petrochem rates to the mandated zero to five percent rates under the ASEAN Common Effective Preferential Tariff (CEPT) scheme.
If the EO is signed before the end of this year, the Philippines will only have to compensate Singapore an estimated $7.5 million from 2003 to 2005.