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NEWS UPDATES Asean Affairs        25  March 2011

Cabinet to resolve ethanol impasse

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The Philippine cabinet needs to break the impasse on ethanol tariffs and clear the way for the release of the already delayed schedule of the country’s most favored nation (MFN) rates of duty for the next five years, according to the Tariff Commission.

Commissioner Edgardo Maralit told reporters on Thursday that the Cabinet-level Committee on Tariff and Related Matters (CTRM) would be convened soon after Congress goes on recess this week. Maralit said the debate on whether to retain or jack up the duty on bioethanol—currently at one percent—was left to the economic managers to decide on.

The impasse over ethanol tariffs has delayed the issuance of an executive order (EO) laying down the country’s MFN tariff structure for the period 2011 to 2015.

MFN rates of duty apply on goods from outside the Association of Southeast Asian Nations (Asean). The deadlock stemmed from the Ethanol Producers Association of the Philippines’ petition, seeking to hike the tariff on bioethanol to 20 percent. The group of local producers has been complaining of cheaper imports from Brazil and Thailand.

Domestic production however has yet to meet the demand as local suppliers could supply only about half of the country’s ethanol needs.

Maralit said the issue on bioethanol was not discussed during the most recent technical-level CTRM meeting, and no recommendation was made.

He said the Department of Energy (DOE)—which oversees the ethanol industry—would have to come out with its recommendation, after which the CTRM led by the Department of Trade and Industry would decide.

The DOE has been mum about its position on bioethanol tariffs.

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It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

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