IT is a win for the buying public. The Department of Trade and Industry (DTI) will thumb down any and all appeals to increase canned meat prices following President Duterte’s decision to retain the 5-percent tariff on mechanically deboned meat (MDM).
Trade Secretary Ramon M. Lopez said the DTI will block any petition to adjust upward the prices of canned meat listed under the suggested retail price (SRP) list. He argued that canned meat makers managed to keep prices stable even before, more so now that the 5-percent duty on MDM is retained.
Under Executive Order (EO) 82, the President maintained the reduced rate of 5 percent on MDM until December 31, 2020.
“They have not increased [prices even before]. So, good, they will not increase [any longer],” Lopez said in a text message. Tariff on MDM, a key component of processed meat products, reverted to 40 percent in May in line with EO 23.
Under EO 23, duties on concessionary agricultural products, including MDM, should go back to their 2012 rates once the country’s rice import cap is lifted and converted into tariffs. The rice trade liberalization law, which converted the import cap into tariffs, took effect in March.
The Bureau of Customs in May then issued a memorandum circular authorizing the collection of higher duties on former concessions.
Citing the higher cost of production, meat processors warned earlier they will need to increase prices of their products. Hot dog maker Frabelle Corp., for one, had planned to implement a price hike of at least 20 percent on hot dogs that cater to lower-income households.
However, with the issuance of EO 82, Trade Undersecretary Ruth B. Castelo said in a text message that meat processors “should retain [current prices] since there is no reason to move their prices” under the 5-percent MDM tariff regime.
Frabelle Group of Cos. President Francisco T. Laurel Jr. for his part said the firm is no longer pursuing its initial plan of increasing hot dog prices. However, he argued the reduced rate should be kept indefinitely until the Philippines develops its own MDM production.
“Yes, we will hold all prices and not increase,” Laurel told the BusinessMirror.
The President, in approving EO 82, said the present economic condition warrants the continued application of lower tariffs on certain farm products to avert potential price hikes. He also said the National Economic and Development Authority Board recommended the retention of reduced rate on MDM.
On the other hand, Laban Konsyumer Inc. President Victorio Mario A. Dimagiba said the government should refund meat processors and importers who paid the higher tariff of 40 percent.
“Customs issued a circular that imposed 40- percent tariff on MDM imports that entered the Philippines after the rice tariff law was signed. This circular should be revoked because this could be used by meat manufacturers as a reason to demand for one good round of price increase,” Dimagiba said over the phone.
“Customs, if it has collected any, should return the money to the meat importers,” he added.