PHL to appeal WTO alcohol ruling

(Updated 5:18 p.m.) The Philippines will appeal the World Trade Organization (WTO) ruling that the taxes levied by the government on alcoholic drinks from the United States and the European Union are illegal, the Trade Department said Tuesday. In a statement, Trade Undersecretary for International Trade Adrian Cristobal Jr. said the department is “thoroughly reviewing the WTO ruling while at the same time working closely with our relevant stakeholders to present a strong case in the appeal process." In a panel report circulated on August 15, the WTO said the excise tax applied on distilled spirits in the Philippines discriminates against imported spirits, such as those from the United States and the European Union. This therefore violates the principle of non-discrimination enshrined in the General Agreement on Tariffs and Trade, the WTO said. Cristobal said the Philippines will have 60 days within which it can appeal the panel’s findings before the WTO Appellate Body. On Monday, the US and EU urged the Philippines to quickly comply with the new WTO ruling. In an interview with reporters Tuesday, Communications Strategy Secretary Ricky Carandang relayed the President Aquino's position that the legislation on sin taxes will address the WTO ruling and the interpretation of Philippine tax rules. “That doesn’t exactly mean ipo-protest natin. Siguro pag-aaralan natin, pero kung may discrepancies between our interpretation and the WTO, we’re hoping that we do the sin tax bill that will resolve those discrepancies," Carandang said. "Not just yet" Meanwhile, the Distilled Spirits Association of the Philippines said the WTO ruling is not yet binding on the parties until the WTO Appellate Body. “Not just yet," the group said in a statement. In a separate statement, EU Trade spokesperson John Clancy said the panel report confirms a “clear" case of tax discrimination. “In light of the clear findings of the panel, we hope the Philippines will take the necessary steps to remedy this longstanding situation without further ado," Clancy said. Earlier, however, the Distilled Spirits Association of the Philippines (DSAP) said the WTO ruling will make an “adverse impact on local manufacturers, allied industries, the Filipino consumers, and the economy in general." “DSAP believes that until the [issue] is resolved by WTO’s Appelate Body, the rulings are not binding on the parties," the DSAP said in a statement last June. It usually takes 90 days for the Appelate Body to complete the appeals process. In 2010, the Philippine distilled spirits industry generated close to $1 billion in revenues. The industry also employs around five million workers, according to reports.— PE/VS, GMA News