THE government is racing against time to lower pork tariffs in its bid to pull down retail prices below P300 per kilogram, but local stakeholders are adamant that that measure would not result in cheaper pork.
Still, importers and traders insist the lower tariffs that are expected to be submitted soon to President Duterte will “enable” them to meet the P270 per kilogram to P300 per kilogram suggested retail price on pork.
Agriculture Secretary William D. Dar said the Cabinet-level Committee on Tariff and Related Matters (CTRM) is set to recommend to Duterte a 5-percent tariff on pork imports within the minimum access volume (MAV) and 15-percent tariff for those outside the MAV for three months.
Afterwards, Dar added, the tariffs would be increased to 10 percent for MAV imports and 20 percent for outside MAV for nine months.
Dar told the BusinessMirror that the CTRM’s recommendation would be “hopefully” submitted to Duterte this week. The difference in the CTRM’s recommendation to Duterte and DA’s petition lies in the duration of the two phases of the lowered pork tariffs.
The DA proposed a six-month duration for the 5-percent tariff (MAV) and 15-percent tariff (outside MAV) and six months for the 10-percent tariff (MAV) and 20 percent-tariff (outside MAV).
Despite the differences between the CTRM’s recommendation and the DA’s proposal, Dar remains firm that the lower pork tariff is critical in the government’s “whole objective” to bring down pork retail prices below P300 per kg.
However, Duterte can only modify the tariff rates on pork imports through the issuance of an executive order when Congress is in session, as stipulated by existing laws.
If Congress will not go into an emergency recess in the following weeks, then Duterte may have to wait until March 27, the calendared date for Congress’s recess, for him to be able to bring down pork tariffs.
It should be noted also that March 27 is just a few days from the expiry of the 2-month price ceiling on pork in Metro Manila, which started last February 8.
No benefits to consumers
Meanwhile, local hog stakeholders remained firm that consumers would not benefit from the lowering of pork tariffs.
“Data showed that lowering of tariff rates will not be passed on to consumers. Only importers benefited on this,” Pork Producers Federation of the Philippines Inc. President Edwin G. Chen told the BusinessMirror.
Chen maintained that pork imports should enter at the current tariff rates —30 percent for MAV and 40 percent for outside MAV—with the collected revenues being used to fund government’s African Swine Fever (ASF)-related programs such as its hog repopulation program.
Hog industry stakeholders wrote to President Duterte as early as January to express their opposition to any proposed reduction of pork tariffs.
Philippine Chamber of Agriculture and Food Inc. (PCAFI) President Danilo V. Fausto shared the same sentiment, arguing that the savings from the tariff reductions “will just be pocketed by traders and importers.”
Fausto is dismayed that the DA did not consider the resolution of the Philippine Council for Agriculture and Fisheries (PCAF) Committee on International Trade and Export to withdraw its petition to reduce pork tariffs.
“If the President really loves the farmers, then he should help the farmers. This is what the President is being advised: to kill the industry, the farmers, for the benefit of the consumers,” Fausto told the BusinessMirror.
Within SRP
Meat Importers and Traders Association (Mita) President Jesus C. Cham told the BusinessMirror that the lower tariffs would allow them to meet the target suggested retail price for pork of P270 per kg to P300 per kg.
Asked if the three-month duration for a 5 percent-15 percent pork tariff formula is sufficient for importers to bring in “cheaper” pork, Cham said “many orders will not make it in time.”
He said, “Depends on the date of effectivity. I surmise many orders will not make it in time. “Also the short duration does not encourage importers to sell but on the contrary, [will] make them wait out the rate changes,” he added.
Nonetheless, Cham said pork imports would still be able to meet the target SRP even at a 10 percent tariff.
“But of course less room to accommodate price increases in CIF (Cost, Insurance, and Freight) and ForEx (Foreign Exchange),” he added.
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