Higher tariff on shoes proposed

15 October 2003

The house committee on Trade and Industry, which supports an Anti-Smuggling Bill, has recommended that Malacanang (the presidential palace) immediately adjust the most-favoured nation (MFN) tariff on imported shoes to 35% from 10% to provide relief to the ailing domestic industry. The Philippines' low tariff rate has made the country an ideal dumping ground for imported shoes. They claim that countries such as Malaysia, Thailand and Vietnam all have higher rates. Aside from dumping, the industry is also hounded by undeclared shipments. The House Committee has accepted a proposal from the Federation of Philippine Industries (FPI) to incorporate the use of Revision Orders in the bill, as a method of determining under-valuation which, technically, is another form of smuggling. In a position paper to the Tariff Commission, S S Ventures International Inc, the country's biggest shoe maker, reported that in 1994, the Philippines had six big manufacturing companies including themselves, Philips Export Industries Inc, L & L Footwear Inc, Shoe City Inc, Lotus Shoe Corp and Paramount Footwear Co Inc. These companies produced athletic shoes for brands including Reebok, Nike, Sketcher, La Gear and Sergio Tachini. The six companies employed around 18,000 workers at that time, according to S S Ventures president Sung Sik Lee. 'Unfortunately, there are only two companies existing today with only 3,000 workers remaining', Lee said. During the economic crisis in Asia, the athletic footwear industry was one of the hardest hit and, in 1999, big corporations such as Nike and Reebok decided to stop placing export orders in the Philippines. Source: Daily 'Manila Bulletin'

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