Investors search low beef obligation for five years

By Luisa Maria Jacinta C. Jocson, Reporter

MEAT TRADERS asked Philippine President Ferdinand R. Marcos, Jr. to cut the tariff on imported pork for the next five years to ensure food security and cool inflation.

In a letter, the Meat Importers and Traders Association said the African Swine Fever (ASF) remained a risk to the industry. The outputs of major pork-producing regions in the world, including those in Europe and North America, have also dropped by as much as 3%, they added.

“We appeal to Your Excellency to issue a new executive order and reinstate the import duty rates on pork of 5% in-quota and 15% out-quota for a duration of five years,” the group said in the letter, a copy of which it sent to reporters on Thursday.

The Philippines imposes a lower in-quota duty on a minimum quantity of imported farm products as part of its commitment to global trade. Volumes outside the quota are charged a higher tariff.

“The conditions that warranted the issuance of Executive Order (EO) 134 still exist today, and in fact has gotten worse for the Philippines as well as for the global landscape,” the importers said.

They were referring to a similar order issued by former President Rodrigo R. Duterte in May last year, when pork prices soared as a local ASF outbreak disrupted supply.

In April last year, he signed EO 128, which lowered the import duty on fresh, chilled or frozen pork to 5% from 30% for in-quota and to 15% from 40% for out-quota purchases for three months.

A month later, he signed EO 134, which lowered the duty to 10% in-quota and to 20% out-quota for the first three months. From the fourth to the 12th month, the tariffs were raised to 15% and 25%. He also raised the pork in-quota volume almost five times to 254,210 metric tons (MT).

Mr. Duterte extended the 15% and 20% duties until yearend before stepping down in June.

The British Chamber of Commerce Philippines backed the meat importers’ plea, saying it would boost pork trade between the Philippines and Britain.

“It’s important to build long-term business opportunities between the Philippines and Britain,” Executive Director Chris Nelson said by telephone, noting that the pound’s depreciation against the peso would make British exporters more competitive.

He also said the Philippines has become Britain’s second-most important market for pork outside China.

“We have time and again responded to the Department of Agriculture’s plea to import meat and augment local supply in times of shortage, most recently in 2021,” the pork importers said in their letter to Mr. Marcos.

“But how can the Philippines compete for supply if other countries have reduced or even eliminated their  duties completely while we maintain ours at 15% and 25%, or worse still, revert to 30-40% by Jan. 1?”

The meat importers said the Philippines would continue to struggle with sporadic outbreaks for which no solution exists, apart from mass culling and slaughter.

“And even if a vaccine with a high efficacy rate were to be commercially available by next year, it would still take our domestic pork industry at least five years to build our herd back up to pre-African Swine Fever levels,” they added.

The traders also cited rising input costs, logistics problems and the peso’s continued depreciation against the dollar.

“Closer to home, our Asian neighbors, and even New Zealand, have responded by reducing their tariff on pork and in some cases also poultry. US pork now has duty-free access to South Korea,” they added.

In July, Vietnam also cut its most favored nation (MFN) tariff rate on frozen pork imports to 10% from 15%.

“No one questions the need to strengthen and develop local agriculture,” the importers said. “A certain level of self-sufficiency is necessary to achieve food security. But the sad reality is Philippine agriculture has not kept pace with population growth.”

Local farmers could increase output to feed 110 million Filipinos given time and the needed state support. “However, this clearly cannot be achieved overnight, and our country must rely on imports at least in the short to medium term to augment supply.”

The Tariff Commission this month said it was reviewing a plea by the Philippine Association of Meat Processors, Inc. to keep the MFN tariff of 5% on mechanically deboned meat of chicken and turkey, which is a key ingredient in processed meats.

In January last year, Mr. Duterte signed EO 123, which modified the rates of import duty on certain agricultural products.  The tariffs on mechanically deboned chicken and turkey were cut to 5% until Dec. 31 from 40%.

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