The last MOA among the naphtha cracker project participants expired last March and since then no new MOA has been drawn.
The sources warned that a further delay in completing and signing the MOA would affect the government’s ability to successfully negotiate a delay in the reduction of tariff rates on certain petrochem products as mandated upon the effectivity of the Asean Free Trade Agreement (AFTA) in 2003.
Petrochemical industry players were previously warned that they would not get the government’s help in seeking an extension of the existing tariff rates on petrochem products unless a new MOA is signed by the major players of the naphtha cracker plant.
Sources pointed out that with 2003 just around the corner, "We should be negotiating now."
The country’s major petrochem players such as the Philippine National Oil Co. Petrochemical Development Corp.; the Bataan Polyethylene Corp., Philippine Resins and Industries Inc., Petrocorp of Asia; and British Petroleum signed an agreement with the Department of Trade and Industry (DTI) last year to set up a naphtha cracker plant in Limay Bataan.
Government wants the project participants to reach and sign a new MOA before it takes an action on the petrochem industry’s desire for further tariff protection until the year 2010.
Under the new MOA, government wants a clear identification of the key players in the planned naphtha cracker plant project; off-take agreements; feasibility studies; and the financial plans.