CONCESSIONARY tariff rates slapped on certain imported farm goods should automatically revert to their levels in 2012 once the rice trade liberalization law takes effect on March 5, a high-ranking agriculture official told the BusinessMirror.
Agriculture Undersecretary for Policy and Planning Segfredo R. Serrano said the current tariffs on the Philippines’s concessions to its trade partners should go back to the 2012 levels once a law removing the country’s quantitative restriction on rice is enacted. This was stipulated in Executive Order (EO) 23 issued by President Duterte.
The tariff changes shall be implemented by the Bureau of Customs (BOC) and no other requirements are needed to do it, Serrano added.
“That is automatic. That is already built-in in the EO of the President and the [Bureau of] Customs should implement it automatically,” he told the BusinessMirror in an interview.
EO 23 extended the concessionary rates on imports of mechanically deboned meat (MDM), frozen potatoes and other concessions while the government is crafting a law that would convert the rice QR into tariffs.
The rates shall apply until June 30, 2020, or until a law related to rice tariffication is enacted, whichever comes first. Once a rice tariffication law is passed, the 2012 tariff rates on the concessions must apply, according to EO 23.
The retention of the concessionary rates was made by the government to show “good faith” to its trade partners that it is undertaking the necessary measures to convert the rice QR.
The government slashed the tariffs on certain agricultural imports as a concession to the country’s trade partners for allowing Manila to extend its special treatment for rice.
The Philippines has been in breach of its commitment to the World Trade Organization (WTO) to convert the nontariff measure into tariffs since July 1, 2017. The waiver, which allowed the country to extend its right to impose QR from 2014 to 2017, expired last June 30, 2017.
Among the concessionary rates that would revert to their 2012 levels are mechanically deboned or separated meat of chicken (HS 0207.14.91), from 5 percent to 40 percent; buttermilk (HS 0403.90.10), from 1 percent to 3 percent; butter (HS 0405.10.00), from 5 percent to 7 percent; and potatoes (HS 2004.10.00), from zero to 10 percent.
Duterte’s ‘test’
UNITED Broiler Raisers Association (Ubra) President Elias Jose Inciong said reverting the concessionary rates is the “right thing to do,” amid deliberations on maintaining the 5-percent tariff on imported MDM.
Inciong added that the petition to retain the 5-percent tariff on MDM imports is a test for the Duterte administration.
“That should be the proper thing to do [revert the tariffs on MDM to 40 percent]. We all know there are other efforts to stop that but it is the right thing to do,” he told the BusinessMirror.
“And we will see how the Duterte ad-ministration will act on [the petition to retain the 5-percent MDM tariff]. I hope they listen to the studies of BSP [Bangko Sentral ng Pilipinas] and DA [Department of Agriculture],” he added.
Serrano earlier disclosed to the BusinessMirror that the Cabinet-level Committee on Tariff and Related Matters (CTRM) decided to retain the 5-percent tariff on MDM of chicken despite the opposition of poultry growers and the DA.
He explained that the Tariff Commission found that reverting tariffs on MDM imports to its 2012 level of 40 percent would not have a “substantial” economic impact.
The DA official added that the BSP has already factored in the 40-percent tariff on MDM in its inflation forecast. Citing the BSP’s study, he said the government would still achieve its inflation targets even if the tariff level on MDM imports would go back to its 2012 level.
“Why would agriculture have to pay just so they could get few more basis points [off] the inflation rate? There is no substantial reason to maintain [the 5-percent tariff],” Serrano said.
He added that maintaining the 5-percent tariff on MDM imports beyond the period of concession would prolong the prejudice against the poultry subsector.
“It was a concession made at a cost to a sector so that [injured] sector should get relief,” he said. “The protection should be reinstated. Now they want to continue the prejudice against the sector.”