Philippines: Law stops Duterte’s pork import plan vs. inflation for now

MANILA, Philippines — The Duterte administration is legally constrained from lowering pork import tariffs while Congress is in session, dealing a huge setback on the ongoing inflation fight and putting into question consumer relief pledged to be already underway.

While already on his desk, a draft executive order allowing more pork imports cannot be signed by President Rodrigo Duterte “while Congress is in session,” Tariff Commissioner Ernesto Albano said in a text message. “(It’s) very clear,” he said.

Under Section 1608 of the Tariff and Customs Code, the president may only tinker with tariffs when the legislature is not in session. Otherwise, tariff laws would need to proceed through the typical and lengthy legislative process.

That presents a latest roadblock to the government’s ongoing efforts to plug a gaping 400,000-metric ton hole in pork supplies because of the African swine flu that infected pigs. And in effect, any delay in allowing more shipments in could blunt a push to slow down inflation that reached a 2-year high of 4.2% in January.

The legal rule means Duterte may only sign the EO by March 27, a day after the current legislative session begins a long break until May 16. That is 4 days prior to the expiration of Executive Order No. 124 that set price ceilings on pork and chicken products for 60 days as temporary fix to the food problem.

In his briefing on Monday, presidential spokesperson Harry Roque made no mention of this predicament, and even went as far as indicating that Duterte is all set to sign the EO. “We can expect that the president will sign the order increasing the MAV,” he said in Filipino.

The EO has two components. First, it exponentially increases the minimum access volume (MAV) for pork imports from the current 50,400 metric tons to 404,210 MT which the agriculture department said represented the current supply shortage. In this point alone, the Executive has a lot of convincing to do with senators finding the plan too huge that it may kill the local hog sector.

“You are killing the local industry,” Senator Cynthia Villar, chair of Senate’s agriculture committee, told agriculture officials during a Senate hearing on Monday. “We’re okay with importation but there should be tariffs.”

Senator Imee Marcos agreed with Villar. “Can’t they just do the regular importation because we all know that consumers can afford imported pork. So why are we bringing down tariffs while expanding MAV? That’s too much,” Marcos said.

But increasing MAV is just one part of the EO. While legally speaking there is no hindrance for the president to increase imports now, the provision’s effectiveness is tied to the drastic lowering of prevailing tariffs to 5% from currently 40% on those under MAV.

Shipments that will come outside MAV will be charged a higher 15%, albeit still way below 40% at present.

At this point, tariff adjustments, as per law, can only be done by Congress by passing a bill. One solution to allow the EO to prosper would be for Congress to take an unscheduled break so the president can go the faster route. This plan was floated in August 2018 when another EO meant to lower tariffs on corn and fish was set to stop inflation that skyrocketed to 5.2%.

Senate President Vicente Sotto III, in a text message, said the chamber is ready to suspend session temporarily and give way to the EO, “if necessary.” House Speaker Lord Allan Velasco has not responded to request for comment.

It was clear from Sotto’s response that Malacañang had not asked Congress to call off session just so the EO can proceed. If that continues, it would take about 1 month before the EO can be issued and more than that before imports can arrive.

Meanwhile, numerous market vendors in Metro Manila stopped selling pork anew as sellers get hurt by retail price ceilings enforced without controls on wholesale prices. Some vendors also stopped selling chicken as supplies dwindled with consumers shifting to the protein source.

Agriculture officials declined to comment when sought. — with Prinz Magtulis and Xave Gregorio