Resolution to the cigarette excise case between the Philippines and Thailand hits a snag as the WTO panel hearing the case has asked for a one month extension to end April this year instead of end this month saying they need more time to review the “fact intensive” case.

Trade and Industry Assistant Secretary Jose Antonio Buencamino told reporters at the sidelines of the turnover ceremony of the DTI reigns from Secretary Peter B. Favila to newly-appointed DTI Secretary Jesli A. Lapus that instead of end March deadline this would be moved to end April.

“This is a fact intensive case so the WTO panel has requested for a one month extension from end March to end April this year by which to come out with its interim report,” Buencamino said.

Buencamino said that the one month delay is significant for the Philippines because the case has dragged on since August 2006 and the local cigarette exporter Philip Morris Philippines Manufacturing Inc. has been posting a bond to enable them to sell in the Thai market.

Under the WTO process, once the interim report comes out by end April this year the two parties are given two to three weeks to appeal the report otherwise the panel will have to issue its final report by end of May.

Buencamino said the Philippines does not intend to appeal whatever is the interim report by the WTO panel and would rather wait for the final report.

If the panel rules against the Philippines , Buencamino said it would be useless to conduct trade with a fellow ASEAN which has slapped a higher tax on the country’s cigarette exports.

“If the WTO ruling is favorable, then Thailand can appeal the decision within 90 days and if we prevail then Thailand would have to comply with the ruling and we expect them to comply,” he said.

“We are confident, we made a good pleading,” Buencamino said.

The dispute started in August 2006 when Thai authorities disregarded declared transaction amounts and charged higher duties, suspecting that exports from Philip Morris Philippines Manufacturing Inc., the country’s largest cigarette manufacturer and exporter, were undervalued.

Thailand suspected that since the cigarette exporter, Philip Morris Philippines Manufacturing, Inc., and the importer, Philip Morris Thailand, are related parties, the declared prices may have been artificially low to reduce tax payments.

PMPMI president Chris Nelson refused to quantify the increase in tariff as well as the bond it has to put up to be able to export to Thailand but described the bond as "financially burdensome."