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Philippines: Permanent tariff cuts, higher quota on pork imports eyed
MANILA, Philippines — President Duterte’s economic team is now looking at the possibility of making the tariff reduction and higher volume of pork imports a permanent policy to further address inflation concerns in the country.
According to the private sector representative in the policy-making body of the Bangko Sentral ng Pilipinas (BSP), the economic team is united in pushing forward several reforms before the end of the administration.
In a webinar yesterday, Monetary Board member Bruce Tolentino said one of the reforms is on the issue of pork imports after pork largely contributed to the high inflation for the majority of 2021.
“The first discussion is taking place around meat and pork, in particular, on whether or not the reduction in the tariffs as well as the increase in the minimum access volume will be made permanent right now,” Tolentino said.
President Duterte issued an executive order last year which raised the minimum access volume (MAV) for pork imports from 54,210 metric tons (MT) to 254,210 MT to increase domestic supply and, in turn, stabilize retail prices.
He also issued an order that brought down the tariff on pork to five percent from 30 percent within the MAV, and to 15 from 40 percent outside of the MAV.
However, these orders have lapsed and the economic team earlier wanted an extension.
Inflation breached government targets for the whole of 2021 and this is largely due to high prices of pork amid tight supply due to African swine fever. It was only in the latter part of last year when inflation started trending down as the impact of more imports was felt.
“I say there is a case now for making these reductions in tariffs as well as the increase in the MAV permanent. This is because Filipinos need the food that they need at a lower cost in order for the cost of living to be well managed,” Tolentino said.
“Fifteen percent is still quite high if you compare it to other countries and 15 percent, I would say, is still enough buffer to protect local producers,” he said.
Meat has been contributing double digit levels at over 20 percent to the headline inflation over the past months.
Tolentino argued that Filipino consumers pay almost double compared to those in Thailand and 30 percent compared to Vietnam.
“The price of pork in the Philippines has been growing over time but the price of pork in Vietnam and Thailand has been stable or even falling. It is a bad situation in our country,” Tolentino said.
In order to make the policy on pork imports permanent, this would either go through legislation or through an executive order.
There is a bill in Congress that will help revitalize the livestock and feed sector.
“I’m hoping that such legislation will be enacted, particularly for livestock through the new livestock bill that’s now being considered. Other changes that are required can necessarily be through another executive order if it’s not covered under the livestock bill,” Tolentino said.
“So, at this moment, these are key policy issues where policymakers, particularly legislature needs to act on before it’s too late,” he said.
Source: https://www.philstar.com/business/2022/01/27/2156559/permanent-tariff-cuts-higher-quota-pork-imports-eyed