Roxas said he has sent a team of negotiators to settle amicably the dispute with fellow Association of Southeast Asian Nations (ASEAN) member Singapore.

Under an ASEAN Free Trade Area common effective preferential treatment scheme, the Philippines was to have lowered the tariffs on petrochemical products to five percent. But Manila in December last year submitted a list of 11 petrochemical products whose tariffs would be maintained at between seven and 10 percent.

Singapore responded by asking for compensation for damages reportedly suffered by its exporters due to the high Philippine tariffs and warned Manila it could also withdraw concessions on its products.

Singapore, one of the Philippines' top export markets, also said that Manila's refusal to adhere to the ASEAN tariff reduction schedules was hurting the group's reputation as a cohesive trade bloc.

Roxas said the Philippines remained committed to "ASEAN solidarity."

"But we have national interest to consider. The Philippines deems the petrochemical industries to be a strategic sector," Roxas said in a statement.

"I want to be sure that if it must come down to a trade war, the burden should not fall on uninvolved sectors like Philippine electronics exports to Singapore," he added.

Singapore is the country's biggest export market in Asia after Japan.

Local trade officials said Singapore was contemplating on withdrawing equivalent tariff concessions on other Philippine exports. The Philippines hardly exports petrochemicals to ASEAN member countries.

                                                      Home