Favila urges Gokongwei firm to start long-delayed naphtha cracker project

Trade and Industry Secretary Peter B. Favila Friday challenged JG Summit Petrochemical Corp. (JGSPC) to start its long-delayed naphtha cracker project.

In a press conference, Favila expressed disappointment at the recent filing of a petition for mandamus by the Association of Petrochemical Manufacturers of the Philippines (APMP).

APMP wants the Cabinet-level Tariff and Related Matters (CTRM) committee to provide the association with the minutes of the CTRM deliberations on the petrochemical tariff issue.

The petition is being viewed as a form of legal harassment and a delaying tactic to prevent Malacañang from issuing an Executive Order that would lower tariffs on 11 petrochemical products.

"If they are really decided, they should start the project instead of waiting for a mandamus. I encourage them to proceed with the project," Favila said.

JGSPC, a leading member of the APMP, is opposed to the tariff increase because it would open the petrochem industry from foreign competition.

JGSPC had argued before the CTRM that without the tariff cover, its naphtha cracker project could be adversely affected.

Unfortunately, JGSPC’s naphtha cracker project has been on the drawing board since the late 1990s and has not materialized due to one obstacle or another.

Aside from the petition for mandamus, the APMP and Mario Jose Sereno, executive director of APMP, the petitioners, also sought civil damages amounting to P500,000 to cover the cost of engaging the services of a counsel.

Favila believes that even with the petition for mandamus, Malacanang can still issue the EO that would finally lower the tariff on 11 intermediate petrochemical products.

Government sources said the delay in the reduction of the tariffs on the remaining 11 petrochemical products is compromising the country’s compliance to the ASEAN Free Trade Arrangement – SCommon Effective Preferential Tariff scheme (AFTA-CEPT)