Industry sources said the move of Roxas to ask the naphtha cracker proponents to create a $200-million escrow account is delaying the project.
Government contends that if the naphtha cracker proponents are able to put up a $200-million escrow fund, then they have enough money to complete the estimated $600-million cost of the naphtha cracker plant.
The "show money" condition, sources added, is also the reason Roxas is delaying action on the petrochem industry’s request for the Philippine government to seek an extension of the tariff cover for the local petrochem industry.
Under the Common Effective Preferential Tariff (CEPT) which takes effect in 2003, existing tariff walls within the Association of Southeast Asian Nations (ASEAN) will be brought down to a range of zero to five percent.
Petrochem industry players have asked Roxas to make a formal request to its ASEAN neighbors to maintain the existing tariff levels until the industry is better able to face competition.
Under certain circumstances, ASEAN members are agreeable to an extension to tariff walls.
Such continued protection had been requested by Malaysia for its automotive industry.
The naphtha cracker project is supposed to make the Philippines sufficient in raw materials for its plastics industry. – Marianne Go