REMOVING the minimum access volume (MAV) for agricultural imports and replacing it with appropriate tariff may bode well for the consumers and local industry, the Philippine Competition Commission (PCC) said.
PCC Chairman Arsenio M. Balisacan told the BusinessMirror that the country can better regulate its imports if the MAV regime is abolished while imposing tariffs.
“Removing the MAV regime and using tariffs instead to regulate imports is a move in the right direction,” he said.
Agriculture Secretary William D. Dar told the BusinessMirror earlier they are looking into streamlining import procedures through reforms in the MAV system and placing a unitary tariff rate for both in-quota and out-quota.
The Department of Agriculture (DA), Dar said, is studying the removal of the current MAV licensing requirements to carry out a “first come, first serve” policy on securing existing quotas for certain agricultural imports.
MAV refers to the certain volume of agricultural imports that are imposed with lower tariffs. In the Philippines, it covers rice, corn, pork, poultry meat, coffee and sugar.
Moving away from the MAV regime, Balisacan said, can address both the concerns with price and supply stability of agricultural products.
There have been supply constraints in pork in the country amid the African Swine Fever (ASF) outbreak. The government has placed different measures to arrest the surging prices due to lack of supply, including imposing suggested retail prices.
“From my view, to enhance price/supply predictability and stability in the industry over the medium to long haul, we should go away with MAV,” he said.
In addition, replacing the MAV with tariffs can “provide farmers with reasonable protection from import surges,” Balisacan said.
Tariffs are in place to protect the local sector as these increase prices for their competitors’ goods. The PCC chief stressed that the tariff to be imposed if ever should be on a par with the Association of Southeast Asian Nation (Asean) peers.
On April 7, President Duterte issued Executive Order 128 following the recommendation of the DA and economic managers to stabilize pork supply and price.
The in-quota tariff for pork imports will be reduced to 5 percent for the first three months of implementation. During the 4th to 12th month of the effectivity of the EO, tariffs will be raised to 10 percent.
Out-quota pork products will be imposed with lower tariffs of 15 percent for the first three months and 20 percent during the 4th to 12th month of effectivity.
The original tariff rates of 30 percent and 40 percent for in-quota and out-quota imported pork, respectively, will be implemented again a year after the implementation of EO 128.
Last week, Malacañang urged the lawmakers to give EO at least two months before they push to scrap the issuance. Senators said previously the order might result in imported pork cornering the market.