Tariff distortion erodes growth of Philippines’ plastic processors

23-Oct-09
Sales figures for the year of Philippines’ plastic manufacturing industry expected to be flat or dip marginally over year ago levels. This pessimism can be blamed on tariff distortions that continue to hurt the sector’s prospects along with the impact of competing imports. A 10% tariff on imported resins is higher when compared to 5% for competing imports of finished goods. The distortion could have been resolved by Executive Order 486 which brought down the tariffs on raw materials to 5%. However, the upstream Association of Petrochemical Manufacturers of the Philippines with JG Summit as a member secured an injunction against this order last year. In view of the incapacity of domestic producers to supply domestic demand, a fresh decision is awaited from the Supreme Court this month. Processors look forward to a favorable decision, failing which, they hope for pending correction of all tariffs by January 2010 under the Association of Southeast Asian Nations Free Trade Area.
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