Aside from the local livestock industry, the Philippine government also stands to lose if the Department of Agriculture’s (DA) proposal to reduce the tariff on pork imports will be given the green light.
This was according to a resolution adopted by the Philippine Council for Agriculture and Fisheries (PCAF), the legally mandated arm of the DA for stakeholders’ participation.
The resolution showed that “reducing tariffs on pork imports will deprive the government of much-needed revenues” amid the COVID-19 pandemic.
“[These are] revenues that would support the COVID-19 vaccination program and efforts to help the livestock industry recover from the African Swine Fever (ASF) pandemic,” the resolution reads.
The PCAF resolution was forwarded to Tariff Commission (TC) Chairperson Marilou Mendoza by Samahang Industriya ng Agrikultura (SINAG) Chairperson Rosendo So.
On Thursday, TC conducted a public hearing on the DA’s proposal to reduce tariffs on pork imports for a period of one year.
To be specific, the DA proposed a reduction in the tariff for pork imports under the minimum access volume (MAV), from the current 30 percent to 5 percent in the first six months of the reduction and 10 percent in the next six months.
For pork imports outside MAV, the recommendation is for the tariff to be reduced from the current 40 percent to 15 percent in the first six months and 20 percent in the next six months.
During the hearing, the DA presented its latest food supply outlook, which showed that the country will face a deficit of 56,142 metric tons (MT) of pork in carcass during this quarter and a deficit of 161,630 MT by the second quarter.
Things will get worse in the third quarter and fourth quarter of the year, with a deficit of 250,935 MT and 388,790 MT of pork, respectively.
But this is just one of the three pork supply outlook that the DA has presented during the hearing.
In another scenario, which is based on Philippine Statistics Authority (PSA) data, the country will actually have a surplus of 147,041 MT by the end of the year. This is in contrast with the third scenario, which is based on industry estimates, showing a deficit of 530,871 MT by the end of the year.
In PCAF resolution, however, it was pointed out that only importers will benefit from the tariff reduction.
Citing official records from the Bureau of Customs, PCAF pointed out that for prime cut of pork alone, the landed cost is only P110 to 120 per kilogram (/kg) at the current tariff of 40 percent. This already included the cold storage cost and the delivery fee to retail outlets.
As of Thursday, the prevailing price for pork stood at P350 to P39/kg at some markets in Metro Manila.
“Importers are easily profiting between P200 to 250/kg at the current retail price of P350 to 400/kg for prime cut,” the resolution said.
“If the intention is to reduce the retail price of pork in the National Capital Region (NCR), why would we further enrich the importers with the proposed reduced tariff?” it added.
Two days ago, agriculture lobby group Kilusang Magbubukid ng Pilipinas (KMP) asked the government to rule out importation in solving the supply and price crisis in the hog industry, which is now plagued by the fatal and highly contagious animal disease African Swine Fever (ASF).
In a statement, KMP asked the government to find ways to bring back prices of pork meat prices to levels before the ASF struck the country in 2019.
Pre-ASF, the average cost per kilo of pork was at P190 to P200/kg.