MDM tariff maintained at 5%

Published January 16, 2021, 5:30 AM

by Madelaine B. Miraflor

The country’s tariff rate for mechanically deboned meat (MDM), a primary ingredient in processed and canned meat products, has been maintained at 5 percent, a source privy to the discussions said.

 According to the source, the Executive Order (EO) on the retention of a 5 percent tariff on MDM has already been drafted and is just awaiting the signature of President Rodrigo Duterte.

If done, this will contradict the supposed retention of a 40 percent tariff on MDM amid the lapse of the country’s Quantitative Restriction (QR) privileges and the eventual enactment of the Rice Tariffication Law (RA 11203).

The Samahang Industriya ng Agrikultura (SINAG) had also formally sought the intervention of Duterte regarding this matter.

 According to SINAG, the imposition of a 40 percent tariff on MDM will bring in additional P5.5 billion additional revenues to the country, which could be used for the government’s COVID-19 vaccination program.

 “MDM importation last year was 274 million kilos. At an average of P50 kilo of imported MDM, the government will only be able to collect P685 million, at 5 percent tariff,” SINAG Chairman Rosendo So told Duterte.

  “At the re-imposed rate of 40 percent tariff, however, government revenue will be at P5.48 billion,” he added.

SINAG’s point of view, however, contradicts that of Trade and Industry Secretary Ramon M. Lopez’s, who is now pushing to keep the 5 percent tariff rate on MDM since this will keep the price of canned and processed meat products in the country from increasing.

Right now, about 90 percent to 95 percent of raw materials of the local meat processing industry are imported abroad amid the lack of MDM production in the Philippines.

 Because of this confusion in tariff, the source said that hundreds of containers containing MDM are stuck in the port area because the manufacturers find the 40 percent tariff too high.