The Department of Agriculture (DA) is pushing for the retention of lowered Most Favored Nation (MFN) tariff rates for essential agricultural products, saying this will contribute to price stability in the food market.

During a forum at the Manila Hotel moderated by former senator Joey Lina and former communications secretary Sonny Coloma on Wednesday, March 13, DA spokesperson Assistant Secretary Arnel de Mesa said the move is essential especially that the country is facing the threats of El Niño.

“Ito ay magagarantiyahan ng matatag, kung hindi man mababawasan, ang mga presyo para sa mga kalakal na ito, lalo na sa nalalapit na El Niño phenomenon ngayong taon na makakaapekto sa ating industriya ng agrikultura. Ang desisyong ito ay lubos na pinahahalagahan (This will ensure stable, if not lower, prices for these products, particularly during the impending El Niño event this year that will affect our farming sector. This decision is highly valued.),” de Mesa.

In 2019, the agricultural sector in the Philippines suffered significant losses amounting to P8 billion due to the El Niño phenomenon.

The tariff rates for pork will be maintained at 15 percent in-quota and 25 percent out-quota. 

Meanwhile, corn will have rates of five percent in-quota and 15 percent out-quota, and rice will be set at 35 percent for both in-quota and out-quota for the extended period.

De Mesa emphasized the necessity of expanding market sources in order to guarantee an ample and reasonably priced food supply within the nation.

This measure, he said, would reduce vulnerabilities and mitigate inflationary impacts caused by El Niño, the escalating consequences of the African swine fever (ASF), and external pressures such as geopolitical tensions and export bans in some countries.

He added that the decreased tariff rates contributed to lower corn inflation, while increasing rice supply and meat importation also helped to lessen meat inflation.

De Mesa cited the significance of executing initiatives that will improve the production of local food and enhance the efficiency of farmers.

"These essential tactics include continuous investments in irrigation, flood management, and adaptation to climate change," said de Mesa.

“It is crucial for short-term and long-term measures to collaborate in order to safeguard the purchasing power of Filipino households and enhance the productivity and income of domestic producers. By doing so, we can guarantee fair and sustainable development for the nation,” he added.

Importing goods in advance

Earlier, De Mesa proposed importing goods in advance as a measure to alleviate inflationary pressures.

“Import frontloading this year involves bringing in imported goods as early as possible for the year. With the increase in domestic supply due to frontloading, prices decrease, leading to controlled inflation,” he said.

However, he noted that the timing of these frontl oaded imports needs to align with the agricultural production cycles of the country.

“Timing plays a crucial role in ensuring that frontloading occurs well in advance or several months following the availability of locally produced goods for harvesting. This strategy serves as a means of offsetting the costs and maintaining favorable farmgate prices for rice, pork, and corn, thus ensuring that these essential commodities are affordably priced,” he added.

The lowered tariff rates will further enhance free trade and strengthen the country's trade relations, according to De Mesa.

“The Philippines relies on imported rice, pork, and corn from various countries, enabling those exporting nations to increase their exports due to the cost-effectiveness of importing these commodities for Philippine buyers,” he said.

On the other hand, he expressed that the prolongation of reduced tariffs will solely benefit importers and traders.

“Local producers are not to blame for the rising prices of staples, such as rice. Local traders, and even those not typically involved in local production, are currently facing challenges in procuring palay due to the surging global rice prices,” de Mesa said.

“However, there is a drawback associated with extending the reduced MFN treatment in the Philippines. As a result, the revenue collected from import taxes on the aforementioned products, which fall under the reduced MFN tariff rates, is diminished,” he added.