Plastics industry seeks review to correct tariff ‘distortions’

THE plastics industry said it wants a review to correct tariff “distortions” which render it uncompetitive against foreign-made finished products, which pay zero tariffs.

Aaron Timothy Lao, Philippine Plastic Industry Association, Inc. (PPIA) president, said during a Tariff Commission (TC) virtual hearing on Wednesday that the distortions are hindering domestic manufacturers of plastics, preventing them from engaging in local manufacturing because of the tariffs on their imported raw materials.

The PPIA represents small- and medium-sized plastics and plastic product manufacturers.

“We have always encountered the tariff distortion because finished products… are imported at zero duty,” he said, noting that imported raw materials pay 10% duty, Mr. Lao said.

“The industry is suffering (and prevented from) creating jobs and paying taxes to the government,” he added.

Correcting the distortion could serve as a first step in making the industry export-ready, Mr. Lao said.

The hearing on Wednesday is the second of the five to be conducted by the TC in the course of the comprehensive tariff review program (CTRP) for the most-favored nation (MFN) tariff schedule between 2024 and 2028, in compliance with Republic Act No. 10863, or the Customs Modernization and Tariff Act.

The second hearing covers the tariffs on chemicals and chemical products.

Association of Petrochemical Manufacturers of the Philippines Executive Director Homer Maranan also urged the TC to act on the multiple tariff lines for linear low-density polyethylene (LLDPE) imports.

“Because of the multiple lines, there are lines (charged) 10%, other lines 3%. We believe that this presents a loophole where imports can avail of the lower tariff rate, although they are technically the same products as the LLDPE imported at 10%,” Mr. Maranan said.

The TC said it plans to merge some tariff lines for chemicals and chemical products to simplify the nomenclature and facilitate customs implementation.

The next hearing of the TC is on March 24 covering textile, paper, and leather products.

The CTRP is conducted every five years to adjust the MFN tariff schedule. — Revin Mikhael D. Ochave