DOF urges Congress to support Duterte order to increase pork imports at lower tariff rates

Robie de Guzman   •   April 21, 2021   •   179

MANILA, Philippines – Department of Finance (DOF) Secretary Carlos Dominguez III has called on lawmakers to support President Rodrigo Duterte’s order to temporarily increase pork importations at lower tariff rates to address pork supply woes in the country amid the COVID-19 pandemic.

In a statement, Dominguez said the recommendation to the President to temporarily reduce pork import tariffs and increase the minimum access volume (MAV) on pork imports was made by him and the administration’s economic development cluster (EDC) “after extensive deliberations and consultations among concerned agencies and the public, with all the tradeoffs considered in the cost-benefit analysis done on this major consumer concern.”

In a letter addressed to Senate President Vicente Sotto III, Dominguez said that as Chairman of the Cabinet’s Economic Development Cluster (EDC), he was taking full responsibility for supporting and recommending to the President to sign Executive Order (EO) No. 128, which temporarily modified the rates of the import duties on fresh, chilled and frozen meat of swine and increased the MAV on such imports.

Dominguez pointed out in his letter that the period of the tariff adjustment under the EO emphasizes that “this is a short-term effort that does not aim to harm the domestic industry” and is actually “complementary to the programs of the Department of Agriculture (DA) in helping the domestic hog industry to recover.”

“I would like to take this opportunity to urge the Senate to support this measure so that some 100 million Filipinos who eat pork, especially the poor, will not be penalized by high food prices. If left unresolved, poverty and malnutrition will increase,” Dominguez said in his letter.

“Elevated pork prices will add another problem to households whose incomes have already been heavily strained by the COVID-19 pandemic. With African Swine Fever (ASF) raging through farms for almost two years, data show that domestic supply will remain inadequate for the needs of consumers,” he added.

Pork prices in the National Capital Region (NCR) have already reached as high as P327 per kilo in March 2021, which is 59 percent higher compared to last year.

In March 2021, meat inflation increased to 20.9 percent and was the top contributor to overall inflation of 1.4 percentage points, even higher than the 1 percent contribution to inflation of rice at the height of the 2018 rice crisis.

Dominguez said that to resolve the ASF crisis gripping the domestic hog industry, the DA has put in place several programs, among them, repopulating the swine population, compensating producers for losses in culled hogs, and investing in long-term solutions to the problems of the swine industry.

He pointed out though that these are medium-term and long-term solutions that will not immediately address the current price pressures affecting pork consumers.

Contrary to misperceptions, the DA does not intend to rely on importation alone to solve supply issues in the long haul, the DOF chief said.

“Even with increased imports, a large part of domestic demand is expected to be covered by domestic production, which the DA will aggressively support with improved implementation of its hog production assistance and repopulation program,” Dominguez said.

Duterte EO on lower pork import tariffs to be amended – Sotto

Robie de Guzman   •   May 5, 2021

MANILA, Philippines – President Rodrigo Duterte’s order to allow more pork imports at lower tariffs for a temporary period will be amended after a compromise on the policy was reached, Senate President Vicente Sotto III said Wednesday.

In a message to reporters, Sotto said senators and the administration’s economic managers have agreed to make adjustments on policies concerning pork importation to “strike a balance” between lowering inflation and ensuring the welfare of domestic hog industry.

“We had to strike a balance between accepting a formula in the reduction of inflation and the protection of the local swine industry,” he said.

Sotto did not elaborate on the amendments that both parties have agreed upon, saying he will let Finance Secretary Carlos Dominguez III make the announcement.

“I’ll let Sec. Dominguez announce the figures we accepted after a seesaw of discussion on both MAV and tariff,” he said.

The Executive Order 128 temporarily cuts 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.

Dominguez earlier said that Duterte’s order was an “immediate and practicable” response to avoid price spikes.

Duterte also said in his order that the policy seeks to address the existing pork supply shortage, stabilize prices of pork meat, and minimize inflation rates.

But senators argued that this could potentially spell the demise of the local hog industry, and called on the president, through a resolution, to withdraw the order. – RRD (with details from Correspondent Harlene Delgado)

DOF: Temporary reduction of pork import tariffs ‘immediate, practicable’ solution to check inflation

Robie de Guzman   •   April 28, 2021

MANILA, Philippines – President Rodrigo Duterte’s order to allow more pork imports at lower tariffs for a temporary period is an “immediate and practicable” response to avoid price spikes, Department of Finance (DOF) Secretary Carlos Dominguez III said Tuesday.

During the resumption of the Senate Committee of the Whole inquiry into the food crisis resulting from the African Swine Fever (ASF) outbreak, Dominguez said the measure was intended to protect Filipino consumers form price spirals that could further drive up inflation and undermine the country’s economic recovery from the coronavirus disease (COVID-19) pandemic.

The DOF chief noted that 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 rely on community pantries for aid.

Dominguez, a former agriculture secretary, said that although the presidential directive appears 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 worse we could do in a situation like the one we are facing today is to let supply issues force food prices up even more. If food prices rise, the inflation rate also increases. If the inflation rate rises, interest rate increases will follow. This unhealthy chain of events will make economic recovery even more difficult for all,” the finance chief told senators.

“The short-term and only practicable strategy for the current problem is contained in Executive Order 128,” he added.

EO 128 temporarily cuts 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.

“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.

He also explained 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 (NEDA).

“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.

The Finance chief also emphasized 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.”

“We are not giving up on the domestic pork industry. The interventions of the Department of Agriculture to help the industry are aggressive. They expect them to yield even greater benefits once a permanent solution to the ASF outbreak becomes available,” Dominguez said.

Senate to reconvene next week to address Duterte appeal on EO 128 – Sotto

Robie de Guzman   •   April 21, 2021

MANILA, Philippines – The Senate Committee of the Whole will reconvene next week in response to President Rodrigo Duterte’s call on lawmakers to give a chance to his order to increase pork imports at lower tariff rates, Senate President Vicente Sotto III said Wednesday.

In a message to reporters, Sotto said the hearing will be held on Tuesday, April 27 to address Duterte’s appeal for lawmakers to consider the intention of his Executive Order 128.

Duterte made the appeal after the Senate Committee of the Whole adopted a resolution calling for the withdrawal of Executive Order 128, which temporarily lowers pork import duties to just 5 percent to 15 percent of the declared shipment value over the next three months.

The order also increases to 350,000 metric tons, from 54,000 metric tons, the total volume of pork that may be imported to the Philippines.

Duterte signed the order in the first week of April in a bid address supply shortage, stabilize prices, and minimize inflation rate due to the African Swine Fever (ASF) outbreak.

Sotto said senators have also agreed to invite Finance Secretary Carlos Dominguez III to the hearing to elaborate on his letter asking Congress to support the executive order.

Dominguez, in a letter addressed to Sotto, said that he and the administration’s economic development cluster made the recommendation to temporarily reduce pork import tariffs and increase the minimum access volume (MAV) on pork imports “after extensive deliberations and consultations among concerned agencies and the public, with all the tradeoffs considered in the cost benefit analysis done on this major consumer concern.”

The DOF chief pointed out in his letter that the period of the tariff adjustment under the EO emphasizes that “this is a short-term effort that does not aim to harm the domestic industry” and is actually “complementary to the programs of the Department of Agriculture (DA) in helping the domestic hog industry to recover.”

Dominguez said that as Chairman of the Cabinet’s Economic Development Cluster (EDC), he was taking full responsibility for supporting and recommending that the President sign Executive Order 128.

Officials from the Department of Agriculture and Department of Justice will also be invited to the hearing, Sotto said.

 

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