Philippine to maintain higher tariffs on 11 petrochems: Will Singapore have to be reimbursed?

25-Nov-05

The Philippines government may have to pay Singapore for its decision to maintain higher tariffs on 11 petrochemical products. The Tariff Commission in Philippines' is to hear the issue of petrochemical compensation products this week. Under the Common Effective Preferential Tariff (CEPT) scheme of the ASEAN Free Trade Area (AFTA) agreement, petrochemical tariffs were to climb down from 10% to 0-5% in 2002. The Philippines, however, acting on a petition by naphtha cracker proponents had agreed to seek for two-year reprieve from its ASEAN commitment. This two-year extension lapsed in December 2004 even as the proponenets failed to set up any naphtha cracker plant in the country. Tariff and Related Matters committee, however, agreed to extend the tariff cover for 6 months with a provision that succeeding extension would only be granted if the Gokongwei-owned P26 billion naphtha cracker project was able to comply with the project's milestones. As per the CTRM, the tariff cover will be granted upon commencement of commercial operation of the naphtha cracker.