‘Lower pork tariff to rein in inflation’

Finance Secretary Carlos Dominguez III said Tuesday that allowing more pork imports at lower tariffs for a temporary period is an immediate and practicable response to protect Filipino consumers from price spirals that could result in higher inflation and undermine the country’s economic recovery from the COVID-19 pandemic.

In a Senate hearing, Dominguez said the spike in meat prices this year has unduly jacked up food inflation, thus exacerbating the problems of unemployment, hunger and reduced or lost incomes for many Filipinos that have led “people to line up at community pantries at dawn.”

Dominguez said that although the presidential directive to ease the pork supply shortage appeared to be a painful solution as it would lead to a revenue loss of P13.68 billion for the government, this would actually slash pork prices to a level estimated to save Filipino consumers a whopping P67.38 billion.

“The gains of consumers reeling from the economic shock of the pandemic dwarf the foregone revenues by P53.7 billion, which is clearly a tradeoff beneficial to the entire country,” Dominguez said during the resumption of the Senate’s Committee of the Whole inquiry into the current pork supply shortfall in the country resulting from the prolonged outbreak of the African Swine Fever (ASF).

Long-term solutions are necessary to deal in the long run with the current situation triggered mainly by the ASF outbreak, and these are already being initiated by the Department of Agriculture, said Dominguez, hence the issuance of Executive Order (EO) 128 to provide an instant, albeit temporary, answer to the current supply and price problems.

EO 128 temporarily cut the tariff rate on pork imports within the minimum access volume (MAV) quota to 5 percent, from the current rate of 30 percent, for the first three months upon the effectivity of the presidential directive. The reduced rate will go up to 10 percent for the next nine months thereafter.

It also increases the MAV quota for pork from 54,210 metric tons (MT) to 404,210 MT. With Macon Ramos-Araneta

The current import quota was set way back in 1998 as part of the implementation of the Agricultural Tariffication Act, which was more than 20 years ago when the Philippines’ consuming population was only 71 million.

“Again, more than the economics of it, EO 128 is a response to protect our people from shortages and price spikes during this difficult time.

We need to do it now for the sake of our countrymen,” Dominguez said.

Dominguez told senators that the increase in the MAV quota for pork factors in the estimated supply deficit for 2021 at up to 477,000 MT based on estimates by the National Economic and Development Authority.

Thus, the temporary increase in pork imports will not “kill” the local hog industry as feared by some quarters, given that imports would potentially account for only up to 22.8 percent of total consumption, Dominguez said.

He also made it clear that the decision to adjust pork import tariffs was not done haphazardly but underwent extensive deliberations and consultations among the public and concerned agencies, with all the tradeoffs considered in the cost-benefit analysis.

The spike in pork prices could immediately be resolved by bringing in more supply, Dominguez said.

Senate President Vicente Sotto III, who presided over the hearing, said they wanted to explore the details of the increase in the minimum access volume (MAV) and the decrease in the tariff on the importation of pork meat.

For her part, Sen. Cynthia Villar stressed anew the power of cartel of importers in determining the prices of goods in the Philippine market should not be underestimated.

Villar, chairperson of the Committee of Agriculture, Food, and Agrarian Reform, said the price of rice was stabilized not only because of free importation, but also because of the dismantling of the cartel, the clipping of the powers of the National Food Authority, and the assistance extended to farmers.

“So, it’s not only about supply and demand that when supply is high, prices go down. It does not happen when there is a cartel,” Villar said. With Macon Ramos-Araneta

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