AS the retail price for liempo is still high at P350 to P400 per kilo, an economist-lawmaker on Wednesday asked the Philippine Competition Commission (PCC) to take action and investigate possible anti-competitive behavior in the pork industry.
In a news conference, Marikina Rep. Stella Luz Quimbo said data showed that only 70 percent of the current Minimum Access Volume (MAV) has been utilized.
“The PCC should investigate the industry’s anti-competitive behavior and penalize all those proven to have violated the law,” she said.
“If the constriction of imports is deliberate and used for purposes of restricting supply and fixing prices artificially at high levels, this is a violation of Section 14 of the Philippine Competition Act, [which provides for anti-competitive agreements],” she said.
With this, Quimbo asked the Department of Agriculture to revisit its policies on unutilized import permits.
“The question is, what exactly is the reason why the price of pork is so high? True, local supply was disrupted. But according to the data coming out of the hearings in Congress, the MAV was not completely utilized. Apparently only 70 percent of the current MAV was used. So it is a mystery why they want to increase the MAV by 649 percent,” she said.
“It is also a mystery why importers do not fully use their ability to import. Hindi ba’t kikita sila kapag magamit nila ang mga permits sa pag-import?…naiisip ko na baka merong pork mafia sa likod nito [Logically, they should make a profit if they use the permits to import, right? I’m beginning to suspect there might be a pork mafia behind this],” Quimbo added.
In February, to stabilize pork prices, the DA recommended to President Duterte the increase of the MAV of pork to 404,210 metric tons (MT). The government raised its proposed volume of imported pork this year to address the expected local demand for the food item, as the African swine fever (ASF) ravaged the local pork industry and tightened supply. The current MAV is only at 54,000 MT.
The National Economic and Development Authority has backed the Committee on Tariff and Related Matters (CTRM) recommendation to immediately lower pork tariffs to 5 percent within the MAV and 15 percent outside the MAV for 3 months, with a slight increase to 10 percent within the MAV and 20 percent outside the MAV for 9 months.
The Neda said these rates are significantly lower than the current 30 percent within the MAV and 40 percent outside the MAV.
Since the MAV is not fully utilized, Quimbo said there is no need to expand it until the DA and Tariff Commission can provide sufficient data and analysis on import volumes under low tariff.
Quimbo also reiterated her request to the DA to submit the “technical basis” of the proposal lowering tariffs on pork products to the committee.
“Under the proposed tariff rates, how many local producers will be affected? What is the estimated loss of local producers when cheaper imported pork increase in supply in the groceries? What are the proposed relief measures? More importantly, what is our assurance that reduced tariff rates will actually result in lower pork prices for consumers?” Quimbo asked.
Last week, the DA created a special committee to look into allegations of corruption in the allocation of meat import certificates under the in-quota MAV scheme.
Under the MAV scheme, the DA issues MAV Import Certificate to MAV licensees that may avail part of the annual in-quota allocation of 54,000 metric tons (MT) and pay a tariff of 30 percent.
Firms wanting to import beyond the MAV volume, called as out-quota, will have to pay a higher tariff of 40 percent.
The DA-MAV Secretariat also imposes penalties on licensees that were not able to utilize 70 percent of their allocation for the year.
The unused volume is recalled and deducted from the licensee and will be raffled off to qualified applicants.
Image credits: Nonoy Lacza