THE National Economic and Development Authority (Neda) is pushing the Department of Agriculture (DA) to fast-track the issuance of the necessary importation documents to avert food supply problems during the holiday season.
Neda Undersecretary for Regional Development Mercedita A. Sombilla told BusinessMirror that this would allow the Philippines to boost its food stocks amid the global logistics crisis.
“We just have to push DA to issue SPS-IC [sanitary and phytosanitary import clearance and] CNI [certificates of necessity to import] early so traders can have shipments early. We already informed the DA [regarding] that problem,” Sombilla said.
Ateneo Eagle Watch Senior Fellow Leonardo A. Lanzona Jr. told BusinessMirror on Thursday this Neda recommendation would also keep inflation at bay, particularly toward the end of the year.
Lanzona explained that higher demand for various food items to celebrate the holidays would often lead to higher commodity prices.
“The decline in the agricultural output in the second quarter was due to lower livestock production. The government should take more definite steps in solving this problem, particularly the ASF [African Swine Fever],” Lanzona added.
Meanwhile, the DA heeded the call of importers to extend the validity of SPS-IC for imported meat to ensure the much needed supply would arrive in the country in time for the holidays.
Agriculture Secretary William D. Dar issued Administrative Order (AO) 21 that authorized the temporary extension of SPS-IC validity by 30 days from 60 days to 90 days.
Dar noted that it is critical to ensure the arrival of meat imports as they “contribute to the overall food supply and security of the country.”
“The current global [Covid-19] situation and supply contraction of container vans have presented shipping and other logistical difficulties,” he said in the order issued recently.
“The abovementioned difficulties have prompted stakeholders to request for an extension of the validity of SPS-IC for imported food commodities, especially for imported meat,” he added.
The temporary extension of the SPS-IC validity for imported pork will be in effect until the end of the year, according to AO 21, which was immediately implemented last August 10.
Shipping delays
The BusinessMirror first broke the story that industry stakeholders have proposed to Dar the extension of the SPS-IC validity to avert additional costs in the retail price of certain food items.
In their letter, the Meat Importers and Traders Association (MITA) urged the DA to extend not only the SPS-IC validity for imported meat but also the minimum access volume import certificate (MAVIC) to accommodate the delays experienced both in shipping and arrival.
Industry players told the BusinessMirror that arrival of
shipments is now taking more than three months with some already taking about four months.
As early as the first quarter, MITA and other industry players had already warned that the lack of vessels and containers in the global shipping market would be one of the challenges that could hinder the government’s pork importation measures this year.
“It’s a start. [We] hope [the] DA will consider to standardize 90 days for all commodities including frozen seafood and frozen fruits/veggies,” MITA President Jesus Cham told the BusinessMirror via SMS on Thursday about his reaction regarding AO 21.
Pork consumers
The Philippines, the world’s eighth largest consumer of pork, imported a record nearly 135,000 metric tons (MT) of pork bellies and cuts in the first half—more than quadruple from a year earlier—as the country rushed to boost domestic supply and temper rising prices, government data showed.
The 367-percent increase in the imports of pork bellies and cuts drove overall pork imports to expand by 176 percent to 277,850.59 MT from 100,745.261 MT in the first half of 2020, Bureau of Animal Industry (BAI) data showed.
BAI data also showed pork imports from January to June already being 8.5 percent higher than the total pork imported by the country in 2020 of 256,017.458 MT.
Foreign pork suppliers are already upbeat about exporting record volumes of pork to the Philippines this year as the country is in dire need of supply, with domestic production dented by the spread of African swine fever.
The twin government measures to reduce pork tariffs to as low as 10 percent and increase the minimum access volume (MAV) of pork by 200,000 MT also whetted the appetite of both importers and exporters. The reduction of pork tariffs and increase in MAV only affects primal pork cuts, such as bellies, hams and shoulders.
The twin measures, initiated by the Economic Development Cluster (EDC), aim to boost domestic pork supply and meat inflation that drove overall inflation to accelerate further in recent months. With the twin measures in place, the Department of Agriculture (DA) aims to pull down the retail price of pork below P300 per kilogram from the current range of P310 to P390 per kilogram. The DA pegged the country’s pork supply shortfall this year at about 400,000 MT.
Fish importation
ON Tuesday, the President’s economic team said the Philippines is preparing to import fish to plug supply gaps as the fishing season comes to a close.
Socioeconomic Planning Secretary Karl Kendrick T. Chua said the government is preparing to issue CNIs to cover the supply gap with the closing of the fishing season. By issuing CNIs, Chua said the government would be able to keep inflation at bay. In July, data from the Philippine Statistics Authority (PSA) showed fish prices increased 9.3 percent, higher than the 8.7 percent posted in June.
However, government sources told the BusinessMirror that discussions are still ongoing within the DA regarding the issuance of CNIs.
The DA has been allowing the importation of fish in recent years during closed fishing season to augment domestic supply and avert price spikes.