RP needs new policies to protect local industries, says DTI official

The Philippines should move to protect their own industries by reviewing its policies especially as the world has entered into a recession, a senior Trade official said.

In an interview, Department of Trade and Industry (DTI) Senior Undersecretary Thomas G. Aquino said they will be reviewing their policies in terms of the commitments of the country in the ASEAN Free Trade Agreement (AFTA).

The AFTA is a trade bloc agreement by the member nations in order to support local manufacturing in all ASEAN countries.

Under the agreement, the 10-percent tariff on sugar will be reduced to zero by next year. Sugar manufacturers have already asked the government to reconsider.

Aquino said they will finish their review before the ASEAN meeting in February.

“We should protect our own industries. Our policy review should be completed and ready before the ASEAN meeting,” the Trade official explained.

However, Aquino did not say the government will adopt a protectionist policy which means that the policies will be geared towards safeguards and duties for imported products.

Local players in the sugar industry called on the government to exempt sugar from the compulsory tariff reduction program under the AFTA which seeks to eliminate all tariffs on imported sugar by 2010.

Earlier, Sugar Regulatory Administrator Lito Coscolluela said that the Philippine sugar producers are fighting for their life amid the sour trends worldwide.

He noted that the the industry leaders have been working on three scenarios, namely seeking a reclassification of RP sugar from “sensitive” to “highly sensitive” category to be able to qualify for exemption from AFTA tariff reduction program; productivity improvement; and generation of alternative products from sugar.

Coscolluela stressed that the move for reclassification is aimed at protecting the local industry against the possible influx of cheap sugar imports.

He said the SRA is leading the negotiations with AFTA right now, but admitted that chances remain bleak.

In 2001, tariff on sugar imports were at 60 percent. Last year it was at 38 percent.

In addition to this effort, Coscolluela said the industry leaders are also working on the potential alternatives of sugar products like bio-ethanol, but added that majority of stakeholders remain skeptical to its viability.