The Cabinet-level Committee on Tariff and Related Matters (CTRM) has agreed to lower pork tariffs to allow entry of cheaper imports in a bid to boost domestic supply and pull down rising prices of meat products.
Agriculture Secretary William D. Dar confirmed to the BusinessMirror that the CTRM has endorsed the lowering of pork tariffs to the Tariff Commission (TC) to undergo due process.
Documents released by the TC on Thursday showed that the Department of Agriculture (DA) petitioned to lower the in-quota tariffs for pork imports to 5 percent for the first six months and raise it to 10 percent in the next six months.
The DA also petitioned to lower the out-quota tariff for pork to 15 percent for the first six months and increase it to 20 percent for the next six months.
Pork imports within the minimum access volume (MAV) or in-quota are currently slapped with 30 percent, while imports outside the MAV are levied with 40-percent tariff.
“The idea of lowering tariff for pork is agreed and the Tariff Commission will do the required consultation,” Dar told the BusinessMirror via SMS.
The BusinessMirror first broke the story that the DA was mulling over lowering pork tariffs to allow entry of cheaper imports to boost local supply and stabilize prices. The DA is eyeing to pull down pork prices to below P300 per kilogram from the current average of about P400 per kg. (Related story: https://businessmirror.com.ph/2021/01/21/government-targets-below-p300-pork-price/).
The lowering of the pork tariffs is on top of the possible tripling of the pork MAV, which currently stands at 54,000 MT, to 162,000 MT, a move that was also first reported by this newspaper. (Related story: https://businessmirror.com.ph/2021/01/18/asf-prompts-phl-to-mull-over-hike-in-mav-allocation-for-pork/).
Industry groups like the Meat Importers and Traders Association (Mita) and Philippine Association of Meat Processors Inc. (Pampi) have earlier proposed to the government to lower pork tariffs to as low as zero.
In a letter submitted to economic managers and Dar last week, Mita argued that expanding the MAV alone would not make a significant impact on pork prices.
Mita President Jesus C. Cham said the tariff on pork imports should be reduced to 10 percent for in-quota imports and to 20 percent for out-quota imports in order to bring down pork prices below P300 per kilogram.
“The reduction of pork duty by a nominal 10 percent will translate into a reduction in landed cost by P15 per kg at current CIF and Forex rates, which savings can be easily passed on the consumers,” he said in the letter obtained by the BusinessMirror.
For its part, Pampi proposed to allow hog producers to import at least 50,000 MT of pork at zero tariff.
In the past, the government has lowered tariffs on pork products as a response to escalating domestic prices such as in 2004 when President Gloria Macapagal-Arroyo lowered tariffs on the meat product to 10 percent.
Economic managers also endorsed to the TC the petition to allow hog producers to import pork at zero tariff.
The Cabinet-level CTRM has submitted to the TC the proposal of an industry group to buy overseas 50,000 metric tons (MT) of pork at no duty. The move, filed by a group of meat processors, seeks to fill in the local supply of pork and, in effect, cut their consumer prices.
Trade Secretary and CTRM Chairman Ramon M. Lopez told the BusinessMirror the panel in its meeting on Wednesday decided that the petition to reduce pork tariffs “be subjected as soon as possible first to a Tariff Commission hearing.”
Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua, for his part, said the committee supports the petition of DA to lower the tariff rates set for pork imports.
In a briefing on Thursday, Chua said, the decision to lower tariffs on imported pork products will help the country ensure its food supply.
Chua, however, did not elaborate on the tariff rate that Neda and the CTRM is supporting. Currently, the tariff for pork imports outside MAV is at 40 percent while imports within MAV is 30 percent.
“In general, we support the proposal of the Department of Agriculture. In fact, the CTRM met and endorsed it but it will have to go through the proper process under the Customs Modernization and Tariff Act and the Tariff Commission is going to immediately conduct the consultation and the due diligence,” Chua said.
Lopez, likewise, said the CTRM directed the TC to consider the matter “urgent” and, as such, be deliberated first above all else. At present, the agency is evaluating petitions made by both the government and private sector mostly on safeguard measures, including the planned retaliation against Thailand over an international dispute.
“All tariff adjustments need to go through public consultation at TC before finalizing the position and decision at the CTRM for recommendation to the President to issue an EO [executive order],” Lopez said.
The CTRM on Wednesday convened to discuss the proposal filed by Pampi to authorize the duty free importation 50,000 MT of pork. The panel is mandated to recommend to the President policies on tariffs, especially on whether to increase or bring these down.
In a letter addressed to Secretary Dar, Pampi requested the government to address the retail prices of pork products by granting hog producers the authority to import at zero tariff.
The letter was also sent to the Pork Producers Federation of the Philippines and National Federation of Hog Farmers.
Pampi’s other proposed measures include provision of financing or trade credit to qualified hog raisers and producers at concessional rates by the Land Bank of the Philippines and allowing the sale of frozen meat in public markets not equipped with refrigeration facilities during the duration of the shortage.
Labeling it as an alternative to the MAV, Pampi argued such a move may contribute in stabilizing both supply and prices at the retail level.
Last week, the DA also asked President Duterte to issue an order capping the retail price of pork kasim at P270 per kilogram and of liempo at P300 a kilo. Families are finding it difficult to serve pork dishes on their tables, as prices of the meat product in the market have reached as high as P400 per kilo, on supply constrains brought about by the deadly ASF contagion.
Consumer groups, such as the Samahan at Ugnayan ng mga Konsyumer para sa Ikauunlad ng Bayan, have demanded the government to hand down a price freeze on farm products to give buyers some form of relief from the cost spikes.
Chua said the government’s priority right now is ensuring that households have adequate food supply amid the Covid-19 pandemic.
He said that by ensuring sufficient food supply, the government will prevent households affected by Covid-19 and the lockdowns from suffering from higher inflation.
1 comment
Very good reportage. Kudos to BM editorial team.
All aspects of the controversy were clearly presented.
Keep up the this brand of journalism!