SENATE President Vicente Sotto III is calling an all-senators caucus on Monday (May 3) as backchannel negotiations continue between the Executive and Congress on a possible compromise over the rate by which pork tariffs will be cut, and the level by which the minimum access volume for pork importations would be increased.
In an interview with DWIZ at the weekend, Sotto expressed hope a compromise acceptable to all parties would be reached, stressing that senators are not only in discussions with the Executive, but also with leaders of major local producer groups.
The talk of a compromise began with the April 27 appearance at the Senate Committee of the Whole of Finance Secretary Carlos G. Dominguez III, who as head of the economic development cluster (EDC) took responsibility for the recommendations and final decision, as approved by the President, on the substantial declines in tariffs, and the increase in MAV to 400,000 metric tons. The local hog sector had protested these moves, saying tariff cuts and huge importation quotas would effectively wipe out the P300-billion industry, already reeling from the impact of the African Swine Fever (ASF). Dominguez had told senators during the April 27 hearing that they were “open to a compromise” on the issues.
In his DWIZ interview at the weekend, Senate President Sotto said “I’m still hopeful there will be a good exchange by Monday or Tuesday after we get back to the Executive,” referring to the offer and counteroffer that both sides had been making, with senators talking separately as well with the hog sector on the new figures on tariffs and MAV that they were discussing with the EDC.
“Because what I wish to avoid is a confrontation on May 17 (when Congress reconvenes from its recess). If we don’t have an agreement, I cannot stop any one from the senators, or even in the House, on May 17, to file a joint resolution to take back the delegated power Congress gave the President,” Sotto added, partly in Filipino.
Asked if he sees a strong chance that a compromise could be reached both on MAV and the tariff cuts, Sotto said they had asked the Executive to consider halving the rate of tariff cuts under Executive Order 128 which slashed the rates from the 30 (in-quota) and 40 percent (out-quota) to just 5 and 10 percent. “Overall, we asked for just half” of what the Executive decreed in terms of tariff cuts and MAV.
“If they wanted to allow 400,000 (mt) as minimum access volume, we suggested, just 200,000. As for the 40-percent tariff they wanted to cut, [we suggested 20] and for the 30 [percent], [just cut to] 15.”
He said this may be more acceptable to local producers or hog raisers. Sotto said the Executive side came back with a counteroffer that was quite far off from their suggestion, “so we met again.”
He said he spoke by phone with Senators Cynthia Villar, Panfilo Lacson and Minority Leader Franklin M. Drilon, and they decided to pitch another counteroffer. The three senators are among the most active in the COW inquiry into the pork crisis and related issues.
Sotto said the Executive, however, stressed anew that they were mainly worried over the continued impact on inflation of the shrinking pork supply, a matter that Secretary Dominguez had kept raising at the April 27 hearing.
Sotto disclosed that the Senate’s suggested halving of the tariff cuts and the MAV was not yet acceptable to the Executive. “They’re okay [with a compromise] but per their computation, [the MAV should be increased to] 254,000, instead of 200,000.”
The Executive, however, “had a different view” of the lawmakers’ suggestion to just cut the tariffs to 20 percent and 15 percent, Sotto said, “so we came back to them and now they have a counter [offer] based on a computation towards the basis for inflation.” All this will be tackled at the all-senators’ caucus on Monday, Sotto told DWIZ.
Sotto said the tariffs remained the “crucial” point of discussions because from where he sat, the MAV is clearly headed for a compromise.
Sotto declined to state what new offer the Senate would pitch if the Executive insists that it cannot cut the tariffs simply by 50 percent of the rates mandated in EO 128.
“I cannot preempt my peers. We lead by consensus so, what is okay with me has to be acceptable to them. Also, we have to consider of course the local producers, the farmers. That’s what’s important to most senators. Therefore, I cannot preempt any one” on the next options.
At the same time, Sotto revealed the senators had been in constant consultation with the local hog raisers while they were negotiating with the Executive.
“Yes, I’ve sent [updates] to the three leaders: AGAP President Nikki Briones, Pork Federation Vice President Chester Tan, and Rosendo So of Sinag. We’ve also been consulting the president of the Pork Federation.”
Sotto explained they were concerned that greatly expanding the MAV “is not an assurance that prices will go down” as imported pork boosts local supply.
“That’s the projection of those simply sitting behind the desk, not those who are in the mud, raising the hogs. So, it’s hard. Our people on the ground see the real situation,” Sotto said.
He pointed out that the swine industry has many allied industries relying on it—certain crops, corn and others used as feed for swine, even transportation, among others, that are closely related to hog raising. That’s why it’s so crucial” to the economy, he stressed.
Asked if his demand to unmask the lobbyists for the tariff cuts and the MAV increase was satisfactorily answered at the last COW hearing, Sotto acknowledged Dominguez’s explanation that it was the “economic managers” who made the recommendations.
However, he noted, the basis of “armchair” decision makers is sometimes not reflective of the situation on the ground. “What you learned at Yale and Harvard is different from what’s happening in the hog farms.”
Nonetheless, Sotto expressed hope that this week’s exchanges between the Executive and Legislative can yield a good compromise.
“I really hope we have a good compromise, because the committee report we will be drafting now will turn out fine if we have a good compromise. But if not, our committee report might come out along with a joint resolution [recalling Congress’ delegated power to the Executive]. But I’m really avoiding a confrontation with the Executive Department.”