January 27, 2022 | 00:00
MANILA, Philippines — President Duterte’s economic team is now considering whether to make reducing the tariff and increasing the volume of pork imports a permanent policy to further address inflation concerns in the country.
According to the private sector representative in the political arm of the Bangko Sentral ng Pilipinas (BSP), the economic team is united to push forward several reforms before the end of the administration.
In a webinar yesterday, Currency Council member Bruce Tolentino said one of the reforms concerned the issue of pork imports after pork was a major contributor to high inflation for most of 2021.
“The first discussion is around meat and pork, in particular, whether or not the reduction in tariffs as well as the increase in minimum access volume will be permanent now,” Tolentino said.
President Duterte issued an executive order last year that increased the minimum access volume (MAV) for pork imports from 54,210 metric tons (MT) to 254,210 MT in order to increase domestic supply and , therefore, to stabilize retail prices.
He also issued an order that reduced the tariff on pork to 5% from 30% within the MAV, and 15% from 40% outside the MAV.
However, these orders have expired and the economics team previously wanted an extension.
Inflation has exceeded government targets for the whole of 2021 and this is largely due to high pork prices amid tight supply due to African swine fever. It was only in the latter part of last year that inflation started to come down as the impact of increased imports was felt.
“I say that it is now appropriate to make permanent these reductions in tariffs as well as the increase in the MAV. Indeed, Filipinos need the food they need at a lower cost so that the cost of living is 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 contributed double-digit levels of over 20% to headline inflation in recent months.
Tolentino argued that Filipino consumers pay almost double compared to those in Thailand and 30% compared to Vietnam.
“The price of pork in the Philippines has increased over time, but the price of pork in Vietnam and Thailand has remained stable or even declining. It’s a bad situation in our country,” Tolentino said.
In order to make the pork import policy permanent, it would either be through legislation or an executive order.
There is a bill in Congress that will help revitalize the livestock and feed industry.
“I hope that such legislation will be enacted, especially for livestock through the new Livestock Bill which is currently under discussion. Other changes that are necessary may necessarily go through another decree if they are not covered by the Livestock Bill,” Tolentino said.
“So right now these are key policy issues that policy makers, especially the legislator, need to act on before it’s too late,” he said.