The US Dairy Export Council has urged the Philippines to reduce the most favored nation (MFN) tariff on dairy exports to provide lower cost, ensure level playing field with other exporters, and widen the country’s sourcing of dairy products, which are dominated by Australia and New Zealand. The group of American dairy exporters, represented by Mac Macatangay, presented their position at the start Monday, March 20, of a series of public hearings via videoconferencing on the Comprehensive Review of the MFN tariff schedule conducted by the Tariff Commission. In particular, the US dairy exporters would like the Philippines to reduce yoghurt tariff to 3 percent from the current 3-7 percent and cheese to 2 percent from 3-7 percent. The non-profit group, representing American dairy producers, noted that the US is not a primary market shareholder in the Philippine dairy market. Australia and New Zealand dominate the local dairy market as they enjoy zero duty access to the Philippines because of the current free trade agreement (FTA) between the ASEAN and Australa-New Zealand. However, the American group warned that “over reliance of suppliers from FTA markets” can disrupt supply, lead to quality issues, and uncompetitive pricing that may not be in  the best interest of consumers. Macatangay said that if supplies are limited from FTA partners, the supply chain can be disrupted as production is dependent on weather conditions. In the case of New Zealand, he said, the government has been exploring avenues to prop up gain production. The use of such over reliance poses credible risks to ensure a sufficient supply of commodities needed in Philippine production given its growing domestic consumer base, he added. Wider supply sources also help reduce inflationary pressures. He warned that economies will continue to be on edge as the improper inflation continues. While the upper middle-class consumers will likely be insulated from pricing resistance, “it is those people living in poverty that will be most affected by future price increases.” Meantime, lowering tariffs for dairy from non-FTA countries  provide companies with greater supply chain visibility and lowering costs and relieve pressures on domestic prices. In addition, he stressed that maintaining supply chain resiliency, especially during global emergencies such as the COVID-19 where supply chain crashes. The council emphasized the need for global integration and the importance of diversified supply chains to ensure adequate and consistent supplies of critical products. Most of the dairy products are used as inputs for Philippine food processing by the food service sectors for the production of high value-added products. These include infant formula products, daily beverages, confectionery and bakery goods. Thus, he said, it is important to include players outside of the FTA markets.