BACOLOD CITY, Philippines?The Confederation of Sugar Producers Associations, Inc. called on the Tariff Commission on Friday to increase the most-favored-nation tariff on bioethanol fuel from 1 percent to 20 percent to protect the country's infant industry.

The national government has to push for tariff protection until the bioethanol industry becomes stable, according to Confed president Federico Locsin III.

"It is not fair to immediately open the (bioethanol) industry to competition from the mature ethanol industry of Brazil that has large-scale plantations and financially fully amortized plants," Locsin III said in a letter to Tariff Commission Chairman Edgardo Agbon.

He pointed out that countries that have successfully adopted tariff protection to help establish their ethanol industries include the United States, India, Brazil and Japan.

Locsin said Confed, the largest sugar producers federation accounting for 50 percent of the country's sugar production, strongly supports the petition of the Ethanol Producers Association of the Philippines, calling for the increase in the tariff to 20 percent.

He said the sugarcane industry needs to diversify its products in preparation for the impending tariff liberalization in 2015 when the most-favored-nation tariff on sugar will fall to 0 to 5 percent.

Unless other products, aside from sugar, are developed, the influx of cheap imported sugar will cause the collapse of the sugarcane industry and the loss of livelihood of five million Filipinos dependent on it, he added.

The sugarcane industry is pinning its hope on the ethanol industry that will use sugarcane as its feedstock, he pointed out.

The Bio-fuels Act mandates that 10 percent ethanol should be blended in all gasoline consumed in the country by year 2010, and to satisfy its market about 130,000 hectares of sugarcane is needed, Locsin said.

This is sufficient to prop up the sugarcane industry against the threat of a liberalized market in 2015, he added.

"It is very clear that the future and survival of the sugar industry depends on the establishment and viability of the ethanol industry," Locsin stressed.

Two years after the passage of the Biofuels Act, only two bio-ethanol plants are operating in the country, one in San Carlos City, Negros Occidental, and the other in Leyte. A third plant is under construction in La Carlota City, Negros Occidental, Locsin said.

"Several other investors are seriously considering investing in bio-ethanol but are still waiting for clearer signals from government before committing," he said.

Since ethanol plants cost billions of pesos to build, investors will stay on the sidelines unless the government creates the environment that allows them a relative secure investment with reasonable return, Locsin said.