THE recent spike in the price of pork already indicates a “severe pork shortage” in the Philippines, according to the National Economic and Development Authority (Neda).
The Neda also confirmed at the hearing of the Senate Committee of the Whole on Tuesday that the National Disaster Risk Reduction and Management Council (NDRRMC) has cleared a resolution for approval by the President to declare a state of calamity with regard to the African Swine Fever (ASF).
During the hearing, Socioeconomic Planning Secretary Karl Kendrick T. Chua said meat inflation in Metro Manila has already reached 59 percent in March from around one percent in 2020. This, coupled with the 26-percent decline in hog production in the first quarter of the year, already point to a shortage.
“The mere fact that the inflation spiked so high suggests a severe shortage,” Chua said. “If the private sector statistics were correct, then [it should be] consistent when we compare the price and the quantity. [We should see] a consistent story. Unfortunately, we don’t. But with the official statistics, we see a consistent story of a severe supply shortage and a severe increase in the prices.”
Based on PSA data, hog production in the first quarter last year was at 571,259 MT. If the first quarter hog production declined by 26 percent, this would place the local hog industry’s production at around 422,731.66.
Chua told senators that for the past three years, the average pork consumption per capita was 15.9 kilograms (kg) per person.
But the preliminary data of the PSA showed that per capita consumption of pork has gone down to 14.3 kg per person. This, he said, is far from the 10 kg per person estimated by the private sector.
Based on Neda’s estimates, this would lead to a pork deficit of around 411,000 MT or around 400,000 MT, if the per capita pork consumption used is 14.3 kg per person, which is the preliminary figure.
These estimates were the basis for the controversial recommendation to increase the Minimum Access Volume (MAV) by 350,000 MT to 404,210 MT from 54,210 MT. The increase in the MAV accounted for the projected deficit in pork production.
“The latest first quarter data….are very consistent with the huge deficit we are seeing and the price is consistent also in showing that the deficit is that big. If the deficit were smaller at 100,000 or less than 200,000, we would not see the inflation of pork that high,” Chua explained.
“In fact last year, the deficit was [over] 170,000 but the inflation was nowhere that high. But now we are seeing the inflation very high and the advance data that I am seeing for the first quarter also [shows] a very high deficit,” he added.
Last week, Finance Secretary Carlos G. Dominguez III, as chairman of the government’s Economic Development Cluster (EDC) took responsibility for the twin proposals to reduce pork tariffs and increase MAV, measures facing opposition from lawmakers.
In a letter to Senate President Vicente Sotto III, Dominguez disclosed that the EDC has instructed the Departments of Agriculture, and Trade and Industry to “work towards” the abolition of the MAV system and “set an appropriate rate of a tariff to regulate the importation of agricultural products.”
Furthermore, Dominguez, a former agriculture secretary, assured Sotto that the importation of pork under the proposed MAV plus of 350,000 metric tons will enter the country “in batches,” according to his letter, a copy of which was obtained by the BusinessMirror.
Earlier, Agriculture Secretary William Dar had given the House of Representatives similar assurance that import arrivals will be “calibrated” carefully to avoid the “flooding” of imports that the local hog sector fears will wipe out whatever is left from the impact of the ASF.
Sotto earlier issued a statement asking Dar to name who are the brains behind the pork tariff reduction and hike in pork MAV.
Image credits: Nonie Reyes