The Aquino administration will raise tariffs on ethanol imported from Brazil and other countries to protect the local industry and raise more revenues for the government.
According to a document from the Tariff and Related Matters Committee (CTRM), the government plans to increase the duties on this biofuel from a percent to 20 percent “to provide a positive signal to investors in ethanol production that the government is supportive of such initiatives.”
The document said the CTRM and the National Economic and Development Authority (NEDA) Board had already approved the increase during the Arroyo administration. An executive order (EO), however, was not drafted and issued before the previous administration stepped down in June.
The CTRM is again endorsing the tariff hike to the NEDA Board for President Aquino’s signature.
The previous administration had brought down the tariff on ethanol from 10 percent to a percent through EO 449. The order was designed to jump-start the biofuels program by making the ethanol-blended gasoline more available at the pumps. However, this spurred the accelerated importation of the biofuel from leading manufacturer Brazil.
Local ethanol makers have been clamoring for the hike in ethanol duties because of competition from cheaper imports. San Carlos Bioenergy, Inc., one of the few ethanol producers in the country, said it is losing almost P15 million a month.
But domestic production has been unable to catch up with the surge in demand as only two ethanol firms have set up shop in the Philippines. Local manufacturers produce less than 80 million liters of ethanol out of the 220 million liter estimated demand this year.
Oil companies said that because of the limited production, they have been forced to import their ethanol requirements abroad.
Under the Biofuels Act of 2006, all gasoline sold in the country has to be blended with five percent indigenously sourced ethanol starting 2009. By 2011, the mandated blend will increase to 10 percent.
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