Coco oil refiners press for 20% tariff till 2004

Coconut oil refiners are urging Trade and Industry Secretary, Manuel Roxas II to help the coconut industry by keeping the tariff on palm and coconut oil at 20 percent from this year up to 2004.

In a letter to Roxas, Jesus I. Arranza, president of the Coconut Oil Refiners Association (CORAL), Inc., complained that the industry was surprised by the Issuance of Executive Order No. 334 by President Estrada which reduced the tariff on palm and coconut oil to 15 percent in 2001, 10 percent in 2002, seven percent by 2003 and five percent by 2004.

Arranza argued that the reduced rates were not in conformity with what had been earlier agreed upon with Roxas. He said that a House bill on tariff rates had also pegged the rate at 20 percent for 2001 and 2002.

It had also been agreed that the tariff level for palm and coconut oil for 2003 and 2004 would be kept open and would be discussed depending on the situation prevailing by that time.

Arranza warned that by lowering the tariff level for palm and coconut oil, coconut oil refiners would experience stiff competition from palm oil coming from Malaysia and Indonesia.

He said the Philippine coconut industry is just starting to recover from the effects of El Niño and needs the support of the government.

Arranza argued further that the demand in the domestic market is very low due to the diminishing purchasing power of consumers.

The influx of palm oil, Arranza said, would eat into the market of coconut oil which can barely support the domestic industry.

Arranza acknowledged that while the House bill pegs the rate at 20 percent, the Senate is not expected to address the issue.

Thus, he said, the coconut industry is left with only one course of action and that is to appeal to the Department of Trade and Industry Tariff and Related Matter (TRM) committee to amend EO 334 and keep that tariff rate on palm and coconut oil at 20 percent for this year and 2002.

Arranza underscored the fact that the coconut industry has been the biggest dollar earner for the country and, therefore, deserves the support of the government similar to what has been given to the tobacco, palay and other agricultural products.

The issuance of EO 334 which modified tariff rates on a number of imported items, has already been roundly criticized by various sectors such as the Truck Manufacturers Association (TMA).