The government stands to lose P3 billion to P4 billion in revenues in the first year alone of the implementation of the Japan-Philippines Economic Partnership Agreement (JPEPA), estimates by the Department of Finance (DOF) showed.
According to DOF data, JPEPA’s proposed tariff reduction schedule of products from Japan would translate to foregone revenues of P3.2 billion to P4.7 billion in the first year of the agreement’s implementation.
Of the low-end of the range of P3.2 billion, total duties amount to P2.85 billion while value added taxes amount to P343 million. The high-end of the range of P4.75 billion, meanwhile, comprise of P4.24 billion in total duties and P509 million in VAT.
The controversial JPEPA which has been at the center of negotiations between Japan and the Philippines has yet to be ratified by the Senate.
Critics of the agreement have been urging lawmakers to junk the deal, saying that the ratification or rejection of JPEPA should depend on how it will affect Philippine industries and sectors.
“So far, the executive has failed to answer these fundamental questions as shown in the past Senate hearings. In fact, the Senate hearings have exposed how grossly one-sided JPEPA is in favor of Japan, and how government negotiators have incompetently negotiated the deal,” an anti-JPEPA group “No Deal!” has said.
The group said the Senate must not limit JPEPA into an issue of constitutionality because its impact on development and livelihood is the more important issue.
The group also said that domestic producers must be protected from foreign competition through trade barriers and not suffer from trade liberalization and zero tariffs.
Under the controversial agreement, Japan excludes 239 items from immediate or future commitments to reduce tariffs but the Philippines has only two items protected from future reductions – rice and salt.
Finance Undersecretary Roberto Tan, however, said that the deal would bring in more Japanese investments into the country which would translate to more employment opportunities for Filipinos.