W. Visayas dev’t council pushes tariff hike on imported bioethanol

BACOLOD CITY — The Regional Development Council in Western Visayas is endorsing the call to increase the tariff on imported bioethanol to protect the local industry.

The recommendation to increase the tariff was one of the legislative proposals presented by RDC Region 6 to the congressmen of Western Visayas during the council’s meeting at the Batasang Pambansa building in Quezon City on Tuesday.

In a report, the RDC-6 was endorsing the call of the Ethanol Producers Association of the Philippines to increase the current tariff on imported bioethanol to 20 percent.

The association is headed by Jose Maria Zabaleta, chairman of the San Carlos Bionergy Inc. in Negros Occidental.

“The increase is being sought to make the local bioethanol industry more competitive. Providing support to the industry, which is still in its infancy, will allow it to stand on its feet,” the RDC-6 said in a report that was presented during the meeting.

But the RDC-6 said the Tariff Commission, the Department of Trade and Industry and the Department of Energy could not act on the request to increase the tariff on imported bioethanol to 20 percent without a legislative action.

The SCBI, considered to be the country’s first bioethanol plant, temporarily stopped producing ethanol in June 2010 even if it could produce 40 million liters annually, the report said. The report said the SCBI had been incurring losses of P15 million to P20 million a month following the entry of cheap imported ethanol from Brazil.

It pointed out that ethanol produced in the Philippines would cost P43 to P45 per liter while that from Brazil had a landed cost of only P31 to P32 per liter.

“Having huge sugarcane plantations measuring as much as 10,000 hectares enables Brazil to produce cheap ethanol. So with a very low tariff imposed on imported Brazilian ethanol, local ethanol producers do not have a chance in competing with them,” the report added.

Executive Order 449 signed by former President Gloria Macapagal-Arroyo in 2006 reduced the import tariff on bioethanol from 10 percent to 1 percent to facilitate the compliance by the country with the Philippine biofuel law because local production of bioethanol was not enough to meet the country’s fuel demand, the report said.

Other countries in Asia, however, impose tariffs on imported bioethanol. Thailand, for instance, imposes a 20 percent tariff on imported bioethanol; Indonesia, 30 percent; and Vietnam 40 percent, the report added. /INQUIRER