The modified tariff rates on imported pork products and rice have resulted in foregone revenues for the government, but the Department of Finance (DOF) said the economic benefits far outweigh the costs.
Finance Undersecretary Antonette C. Tionko said the government is projected to lose P5.4 billion and P40.9 million during the temporary implementation of adjusted tariffs on imported pork products and rice, respectively.
President Duterte issued Executive Order No. 135 in May authorizing the temporary reduction of the Most Favored Nation (MFN) tariff rates on rice imports.
Under EO 135, the rice tariff rate was reduced to 35 percent from 40 percent rate for those within the minimum access volume (MAV) or in-quota and 50 percent for out-quota for a period of one year.
A separate EO 134 was also issued by President Duterte allowing the reduced tariff rates for pork imports to increase to 10 percent (in-quota) for the first three months, raising to 15 percent from the fourth to 12th month.
The tariff rates for pork imports outside quota now at 20 percent for first three months, followed by 25 percent for the next nine months.
“Since June 2021, basically because of EO 135, that's on the rice, we incurred P11.39 million from lowering the tariff rates on rice,” Tionko said. “So for pork importation, since the EO on that was released, we incurred a loss of P2.52 billion since April.”
But despite revenues, Finance Secretary Carlos G. Dominguez III was pleased with the results of President Duterte’s EOs.
For instance, Dominguez cited that the rise in prices of pork stopped while local supply increased.
“We are looking at the health of the entire economy and the welfare of the people. It’s worth it to lose some revenues so that people’s food costs are not increased. That’s really the justification of that,” Dominguez said.
Meanwhile, the finance chief said that lowering the rice tariff for non-ASEAN is “just common sense."
“We are one of the biggest rice buyers in the world and why should we leave it ourselves to buy only from certain people. Vietnam buys a lot of rice from India. Vietnam is actually buying a lot of brokens, broken rice from India,” Dominguez said.
“They make that into noodles and then they consume and export their good quality rice. It’s just international trade; you use where it’s cheapest,” he added.