Customs loses P3.4 B from lower pork tariffs

The Bureau of Customs (BOC) incurred P3.4 billion in forgone revenues due to lower pork import tariffs, the Department of Finance (DOF) reported on Monday, Nov. 22.

The tax collection losses stemmed from the government’s effort to boost the supply of pork and stabilize its retail prices in the domestic market but it cost the agency P3.4 billion as of mid-November.

To recall, President Duterte issued a series of executive orders (EOs) that lowered pork import tariffs and increased the allowable import volumes of the meat to help stabilize the domestic supply and prices.

Executive Order (EO) No. 128, which lowered pork import tariffs to five percent within its minimum access volume (MAV) and 15 percent outside MAV for the first three months, was in effect from April 7 to May 14.

EO 134, which superseded EO 128, set tariffs on pork imports under the MAV to 10 percent for the first three months, and 15 percent in the next nine months.

For imports outside the MAV, the tariffs are 20 percent for the first three months and 25 percent in the succeeding nine months.

The one-year effectivity of EO 134 began on May 15, 2021.

In a report to Finance Secretary Carlos G. Dominguez III, the BOC said that from April 7 to Nov. 12 this year, pork imports have reached 197 million kilograms (kg).

“To compute for the effect of the two EOs, we multiplied the dutiable value of meat by 25 percent—less 5 percent and 15 percent—which were already paid for EO 128, and multiply the dutiable value by 20 percent and 15 percent for EO 134. The result showed a revenue loss of P3.4 billion,” Guerrero explained.

Guerrero said the volume of pork imports started spiking in March and continuously grew between April and May, but dropped starting June.

The volume of pork imports in April, the month when the two EOs took effect, grew 500 percent, from 4.07 million kg in the same month last year to 24.45 million kg.

This dramatic increase in pork import volumes continued in May, when a total of 36.5 million kg entered the country, representing a 506-percent hike from the 6.02 million kg imported in the same period in 2020.

In June, pork imports reached 33.62 million kg, which was 531.39 percent more than the 5.32 million kg brought into the country during the same period last year.

Pork imports continued its steady drop in July, when volumes totaled 31.18 million kg, which was 370.4 percent more than the 6.63 million kg, recorded in the same month of 2020.

In August, pork imports increased 271.59 percent year-on-year, and dropped to 164.55 percent in September and 78.47 percent in October.

The volume of pork imports was 6.41 million kg in August 2020 and 23.82 million kg in August 2021; 9.73 million kg in September 2o20 and 25.73 million kg in September 2021; and 10.85 million kg in October 2020 and 19.36 million kg in October 2021.

From Nov. 1-12, pork imports of 7.47 million kg were lower by 11.64 percent compared to last year’s 8.46 million for the same period.

Meanwhile, the bureau reported that it has so far collected P3 billion from swine meat imports as of mid-November 2021.