To cushion the impact of the Ukraine-Russia conflict on domestic food prices and supply, President Duterte extended lower tariffs on pork and rice until the end of the year. The President has also lowered corn tariffs to as low as 5 percent and coal tariffs to zero until the end of the year.
Duterte signed Executive Order (EO) 171 series of 2022 last May 21 that kept the lower tariff rates on pork and rice and reduced the tariffs on imported corn and coal. The EO, however, was only uploaded to the Official Gazette website on May 26.
Duterte’s signing of the EO was a few days before his power to modify tariff rates lapsed since Congress resumed session last May 23. The President can only modify tariff rates when Congress is not in session.
In the EO, Duterte noted the on-going conflict between Ukraine and Russia has pushed “worldwide prices” of various commodities including corn to “multi-year highs.”
He added that increase in prices of oil products, corn and fertilizers “generated a corresponding sharp increase in domestic prices of commodities and energy,” which resulted in “upward pressures” in the country’s inflation.
“There is a need to temporarily maintain the reduced tariffs on imported rice and pork products to attain the objectives of EO Nos. 134 and 135, capitalize on the gains already achieved by these measures, for the purpose of augmenting the supply of these products in the country, diversifying the country’s market sources and maintaining affordable prices, towards ensuring food security,” he said.
Duterte explained that he also reduced the tariffs on imported corn and coal “to mitigate and stabilize the impacts of inflationary pressures” brought about by the Ukraine-Russia crisis. He noted that lowering the tariff rates on these two commodities would allow the country to expand its supply sources and reduce prices of key commodities.
Under EO 171, the in-quota tariff rates on imported pork shall remain at 15 percent while out-quota tariff rates would be at 25 percent. The uniform 35-percent tariff on imported rice shall remain in effect until the end of the year.
For corn, imports within the minimum access volume (MAV) or in-quota shall be slapped with a 5 percent tariff while out-quota volume will be levied with a 15-percent tariff rate. Imported coal products shall have zero tariff rates for the duration of the EO 171.
The BusinessMirror broke the story last month that the Committee on Tariff and Related Matters recommended to Duterte the reduction of corn tariff rates and the extension of current duties on pork and rice to mitigate the impact of global economic challenges on domestic food prices. (Related story: https://businessmirror.com.ph/2022/04/25/govt-turns-to-tariff-tweaks-vs-inflation/)
The Philippine Association of Meat Processors (PAMPI) earlier noted that the reversion to higher tariff rates on imported pork could have inflationary effect since the country still reels from lower pork supply and high retail prices of meat the product due to consequences of African swine fever (ASF) devastation to local pig farms. (Related story: https://businessmirror.com.ph/2022/05/18/meat-processors-seekeo-to-keep-importedpork-tariffs-at-low-rates/)