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By Katrina Mennen A. Valdez, Reporter
THE Philippines finally removed import duties on
most product and service categories as part of its commitment under
the Asean Free Trade Area (AFTA).
Duties on a total of 4,515 product categories
representing 80 percent of the country’s tariff lines were removed
with respect to imports from other members of the Association of
Southeast Asian Nations. The removal of the so-called comprehensive
effective preferential tariffs (CEPT) under the AFTA would take
effect this year.
This is after the government this month
published Executive Order 617, which directed the said tariff
reduction under Phase 1 and 2 of the Asean’s 11-sector Priority
Integration Program.
President Gloria Arroyo signed EO 617 in April
last year, but publication of the order, which would have triggered
its implementation, was put off due to monetary constraints, as the
government was struggling to keep its budget deficit below a
P63-billion ceiling. Latest estimates from the Department of Finance
showed the government may have ended last year with a funding gap of
P15 billion, or well below the official ceiling.
The Priority Integration Program identifies 11
sectors as catalysts of economic integration of the region. Sectors
that form part of the program would be subject to an accelerated
reduction of tariffs.
The 11 priority sectors are electronics,
healthcare, wood-based products, automotives, rubber-based products,
textiles and apparel, agri-based products, fisheries, healthcare,
air travel and tourism.
Besides fiscal concerns, the government also
postponed the publication of the Malacañang order after discovering
that the said directive accidentally included used motor vehicles
among those categories the tariffs for which would be removed. Had
this come to pass, the Palace order would have undermined an earlier
directive, EO 156, which bans the importation of used vehicles.
EO 156 provided for the country’s Motor
Vehicle Development Program, which aims to strengthen local assembly
and export of vehicles and auto parts.
Local assemblers led by the Chamber of
Automotive Manufacturing of the Philippines Inc. had campaigned for
the ban on used vehicles, which had eroded industry sales. Despite a
legal challenge posed by importers of used vehicles, the local
assembly industry secured a Supreme Court order upholding the ban
provided for under EO 156.
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