DOF open to lower tariffs on some agricultural goods

Published August 16, 2018, 12:00 AM

by manilabulletin_admin

By Chino S. Leyco

 

Carlos G. Dominguez III. (Bloomberg)
Carlos G. Dominguez III. (Bloomberg)

 

The Department of Finance (DOF) is open to the proposal to reduce the tariffs imposed on four agricultural products despite the potential revenue losses once the plan is implemented.

While the proposal remains uncertain, Finance Secretary Carlos G. Dominguez III said the reduction in the tariffs of fish, corn as well as meat, particularly chicken, and wheat imports, to five percent needs to be studied.

“That was a suggestion, we are studying it, but I’m a little bit uncertain now on what is really the conditions from some people from the House [of Representatives]. I’m not sure I listened to one interview and it was saying that they’ll make some changes,” Dominguez told reporters.

Currently, there is a proposal for a “uniform” five percent tariff on these four food items.

Based on the DOF estimates, the proposed reduction in the tariffs of chicken and fish alone would result in P2.8 billion in foregone revenues.

Finance Undersecretary Gil S. Beltran said the decision on the tariff should be balanced out as this could significantly dampen the retail prices of locally produced chicken and fish if drastically reduced.

“Before you change the tariff rate you have to conduct public consultation and get the views of the producers, on the other hand, you have to look at the interest of consumers. It’s a balancing act between looking at the level of protection for producers and consumer interest,” Beltran said.

The finance official, however, said the DOF will oppose the plan should the proposal is to reduce the tariff to zero percent, adding the reduction should also be temporary.

“We have no problem if you don’t zero it out. If there’s a three to five percent, we will collect more [revenues] because the volumes will more than make out for the reduction,” Beltran said.

Dominguez explained that the issue on agriculture tariff, particular fish, is “very complicated.”
“We are consulting with the Bureau of the Fisheries, why the fish catch is declining. It’s really a complex issue so we have to understand really what is going on,” the finance chief said.

Earlier, House Speaker Gloria Macapagal Arroyo urged President Rodrigo R. Duterte to issue an executive order to cut tariffs on fish, corn, and meat imports to temper the skyrocketing commodity prices.

The current tariffs on imported meat products range from 10 percent to 40 percent, while fish carry a 10 percent duty and corn is levied at 40 percent.

Budget Secretary Benjamin E. Diokno had said that the Duterte administration’s economic managers were looking at the proposal by the House speaker.

“We are leaning towards a uniform reduction to five percent, not zero.” Diokno said. “We want to make it five so it’s simpler, more uniform.”

Diokno also said the President can issue such an executive order if Congress is not in session.

 
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