MANILA, Philippines - President Gloria Macapagal Arroyo has approved a proposal to extend the duty-free importation of wheat and cement, a Cabinet official yesterday said.

The move, Trade Secretary Peter B. Favila told Malacañang reporters in a teleconference, will help stabilize domestic prices of the two commodities.

"The President approved that," Mr. Favila said in response to a question regarding proposals to extend Palace orders which lapsed last month.

Prior to this, "The Cabinet approved the recommendation of the CTRM (Committee on Tariffs and Related Matters) for a six-month extension of zero tariff [on wheat and cement]," he said.

"That is where it is today."

Sans the exemption, importers are required to pay a 3% tariff if they are purchasing from member-countries of the Association of Southeast Asian Nations (ASEAN) and 5% if they buy elsewhere.

The extension of zero tariffs will be implemented retroactively.

Mrs. Arroyo in December 2008 issued Executive Orders (EOs) 765 and 766 which lifted duties on cement and wheat for six months.

After the directives lapsed, a six-month extension was ordered with the issuance of EOs 818 and 819 in July 2009. Both orders expired last Jan. 12.

Mr. Favila did not say when new EOs would be issued.

The Philippine Flour Millers Association, he claimed, committed to keep prices upon learning of the extension of the zero tariff for wheat.

"They told me they might be compelled to pass on to the bakers the cost of flour. I ... told them that the zero tariff was extended and so they said they will not adjust their prices," Mr. Favila said.

For his part, Cement Manufacturers Association of the Philippines President Ernesto M. Ordoñez said: "We believe it [the tariff] should really be 5%."

"We will follow the law even if 0% is difficult for us. We have nothing against imports as long as they are not importing substandard cement. We will be vigilant against substandard cement," he added.

The revenue implications of zero tariffs, said Mr. Favila, are not significant.

"The Department of Finance and Department of Budget and Management, rightly so, had some reservations because of revenue implications. But [Finance] Secretary [Margarito B.] Teves said the amount was not really significant," he claimed.