METRO Bacolod Chamber of Commerce and Industry president Roberto Montelibano stressed the need for at least 30 percent increase in tariff for ethanol.

The said tariff increase is to protect the "accelerated development" of the biofuels program in the country.

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The increase in tariff for ethanol from one percent to 30 percent will encourage more investors to put up more ethanol plants and meet the 10 percent ethanol blend by 2011 mandated under the Biofuels Law, he said in a press statement.

Philippine Government is currently imposing one percent tariff only which Montelibano cited that Executive Order No. 499, which President Gloria Macapagal-Arroyo signed in 2005, reduced tariff to one percent "because at that time there was no local producer of ethanol."

He, however, cited that in other Asean countries, particularly Indonesia, ethanol producers are given as much as 30-percent protection from imports.

In a petition letter sent last week to the Tariff Commission, the Ethanol Producers Association of the Philippines (Epap) demanded an increase in tariff for ethanol from one percent to 20 percent, Montelibano said.

The local ethanol industry has not progressed much because it lacks equity investments and a stronger political support. It added unless there is strong government support, investors will remain reluctant to commit billions of pesos into the Philippine ethanol industry, said Epap.

MBCCI also urged the Department of Energy to issue a Department Order requiring oil companies to sign supply and purchase agreement with the local bio-ethanol investors and producers qualified under the implementing rules and regulations of the Biofuels Law.

MBCCI director for Agri-Industrial Development Greg S. Lopez said a higher tariff for ethanol is the only plausible solution to the "threats" in our economy.

"The Philippines is importing 90 percent of its liquid fuels which run all its air, sea and land transportations thus the whole economy is dependent on liquid fuel. If there is a threat to this liquid fuel, the whole economy could be crippled," Lopez explained.

To safeguard the country against these threats, whether a simple threat from oil producing countries or a global turmoil like war, will strengthen the local source of liquid fuel, Lopez said, stressing bioethanol as one of the indigenous fuels.

He said a study of Usaid-funded Eco Asia Project cited the Philippines as having the potential to produce as much as 1.7 billion liters of ethanol.

Further, Lopez said that if the 700,000 hectares identified in the convergence survey of the Department of Agriculture, Department of Natural Resources and Department of Agrarian Reform were deployed, twice that amount or almost 70 percent of the projected fuel needs of the country by 2012 can be produced locally. )GMD)