Rationale for Tariff Protection
- Studies by the Board of Investments and the Department of Industry show increased raw material costs make the project viable only with interim tariff protection.
- The tariff protection aims to shield the local industry from imported competing products, which drain foreign exchange.
Grant of Post-Operative Tariff Protection
- The production of phthalic anhydride is entitled to post-operative tariff protection.
- This protection takes the form of increased customs duties on imported phthalic anhydride.
- The tariff rates may be modified during the protection period under conditions stated in Section 401 of the Tariff and Customs Code if industry conditions justify it.
Specific Tariff Rates Imposed
- Under Section 1, specific tariff rates on articles classified under Section 104 of Republic Act No. 1937 (amended by PD No. 34) are prescribed:
- A. Articles excluding those in B and C, including dimethyl terephthalate and terephthalic acid: 10% ad valorem duty.
- B. Phthalate plasticisers and esters of phthalic anhydrides: 50% ad valorem duty.
- C. Phthalic Anhydrides: 30% ad valorem duty.
Effective Date and Enforcement
- Section 2 provides the tariffs apply thirty (30) days after issuance of the Executive Order.
- All described articles entered or withdrawn from warehouses for consumption in the Philippines after this period shall be subject to the prescribed duties.
Legal Authority and Effect
- Issued by the President of the Philippines under constitutional powers and upon Board of Investments recommendation.
- Implements tariff measures intended to support a pioneer industry deemed strategically important to local economic development.