By Jasper Emmanuel Y. Arcalas & Rea Cu
The Philippine Association of Meat Processors Inc. (Pampi) is asking the Bureau of Customs (BOC) to stop collecting the 40-percent tariff on mechanically-deboned meat (MDM) of chicken, saying the rice trade liberalization law did not authorize the reversion to a higher rate.
Industry sources also told the BusinessMirror that they are more concerned about the BOC’s decision to collect the 35-percent tariff difference on earlier chicken MDM shipments than the ban imposed by Manila on German meat imports.
In a letter sent to Customs Commissioner Rey Leonardo B. Guerrero last June 21, Pampi’s legal counsel Ma. Luz S. Azraga-Mendoza complained about the “unwarranted imposition of excessive duty rate of 40 percent on MDM.”
Mendoza said the right tariff should be 5 percent since the implementation of Republic Act (RA) 11203 did not automatically mean a reversion to the higher duty rate of 40 percent for MDMs.
“We are respectfully requesting your good office to issue a directive immediately stopping the further imposition of the 40-percent duty rate on MDM and order for the refund of the excessive payments advanced by the aggrieved importers,” she said in the letter obtained by the BusinessMirror.
Chicken MDM is a key component for processed meat products, such as hot dogs and canned luncheon meat.
“Though it cannot be gainsaid that RA 11203 already lifted the quantitative imports restriction on rice, said law however did not authorize any reversion to the higher duty rate of 40 percent insofar as MDM is concerned,” she added.
Arzaga-Mendoza said
even President Duterte “never gave his imprimatur to the honorable commission
to unilaterally order the impo-
sition and collection of the aforementioned rate.”
The President issued Executive Order (EO) 82 on June 14, which retained the 5-percent import tariff on MDM until 2020.
Pampi said the decision of the BOC to collect a 40-percent tariff on MDM and the collection of the tariff difference had significantly affected the meat processing industry.
“By reason of the sudden upsurge,
our meat importers are being constrained to incur staggering amount of costs.
Not to mention the serious threat to their viability, especially those new
players who cannot afford the additional burden,”
Mendoza said.
Pampi’s counsel said Atty. Erastus Sandino B. Austria, District Collector of BOC at Manila International Container Port (MICP), earlier issued letters to MDM importers demanding the payment of the 40-percent duty rate and threatening to impose the corresponding surcharges and interests starting March 5, when RA 11203 or the rice trade liberalization law took effect.
The BOC insisted that the adjustment of the rate to 40 percent was in accordance with what was discussed during a meeting involving the BOC, Tariff Commission (TC), DOF and the National Economic and Development Authority (Neda) on April 12 in line with the implementation of the rice tariffication law.
The TC called the meeting after Pampi requested the BOC to reinstate the 5-percent tariff on imported chicken MDM. The BOC sent the letter of Pampi to the commission on April 3.
Impact on prices
The increase in the prices of some processed meat products can be averted if the BOC will no longer retroactively collect the 35-percent tariff difference on imported MDM from March 5 to May 16, according to industry sources.
The BOC earlier said it expects the Manila International Container Port (MICP) to net an additional P400 million from the collection of the 35-percent tariff difference from importers and processors.
However, meat industry sources said the figure could go as high as P1 billion given the volume of chicken MDM that local processors import monthly. “If the BOC would not collect those P1-billion back taxes then the meat processors could just easily absorb whatever price increases in raw materials due to limited supply, such as the banning of German imports,” the source said.
Manila banned all meat products from Germany—the second top source of Philippine meat imports—after the Bureau of Animal Industry (BAI) discovered a major breach of quarantine protocol for African swine fever (ASF).
Agriculture Secretary Emmanuel F. Piñol issued a memorandum order authorizing the suspension of the system accreditation of German foreign meat establishments to ship meat products to the Philippines. The order takes effect immediately.
Piñol said BAI’s investigation found that the confiscated meat shipments from Germany last June 27 in Cebu contained 250 kilograms of pork from Poland, a country struck by ASF. Poland was banned from exporting meat to the Philippines due to the outbreak of the fatal pig disease.