Meat processors seek retention of tariff on raw material imports

MANILA, Philippines — The country’s meat processing industry has called for the retention of tariff rates on imported raw materials for processing to keep food prices manageable and help ease inflationary pressures.

In a petition, the Philippine Association of Meat Processors Inc. (PAMPI) is asking the Tariff Commission to retain the current most favored nation (MFN) tariff rates on mechanically deboned meat (MDM) or separated meat of chicken at five percent and meat and edible offal of turkeys not cut in pieces, frozen at 20 percent.

Also included are the MDM of turkey at five percent and meat cuts and edible offal of turkeys, frozen, other than livers or MDM or separated meat at 20 percent.

“We would like to clarify our position on this petition that we are limiting our request for the retention of the prevailing tariff rates of five percent and 20 percent for poultry and fowl and we are not including other non-rice products in our petition,” PAMPI executive director Francisco Buencamino said.

MDM is a paste-like meat product produced by forcing pureed or ground beef, pork, turkey or chicken, under high pressure through a sieve or similar device to separate the bone from the edible meat tissue.

Poultry growers, however, want the government to raise tariff rates on imported MDM.

PAMPI said an increase in tariff rates from five percent to 40 percent will raise prices of hotdogs and canned meat products that contain 12 to 17 percent MDM.

“If the tariff on MDM stays at five percent, this price increase can be avoided. However, other factors such as the strong dollar against all currencies including Philippine peso, fuel cost increase, labor cost increase and tin can cost increase will put pressure on our costs,” Buencamino said.

“While PAMPI members have tried holding off market prices to cope with the increased costs of production and manufacture, we may not be able to hold off much longer. The disappearance of processed meats from the markets will allow wet market prices of table grade meats to go through the roof,” he added.

The group warned that raising the duty on an ingredient that is so widely used may be ill-timed and ill-advised and will make the Filipino consumer suffer.

“The impact of the increase in prices of processed meats will not stay only with processed meats. Other sectors, particularly the resellers groups such as supermarkets and institutional distributors, speak of the collateral damage of possible hoarding of goods, a scenario predicted by these resellers,” Buencamino said.

“The increased cost of doing business will discourage institutional growth, foreign direct investments to fuel the need to feed our ever-increasing population count,” he added.

PAMPI said the use of MDM in the country as raw material ingredient for processed meat has contributed to the affordability of the protein source especially in challenging times of high inflationary effects caused by a number of uncontrollable factors.

It has been used since the late 1960s in certain meat and meat products such as hotdogs, luncheon meats and sausages and does not compete against table grade meat.

“The use of MDM in processed products has allowed us to maintain affordable, protein-filled, wholesome processed meats which benefit the consumers and its use continues to be regulated by the National Meat Inspection Service,” Buencamino said.

MDM is not meant to be consumed in its original form, but as a raw material ingredient in the manufacture of processed meat. The Philippines imported 189.1 million kilograms of MDM last year, up from 168.7 million kg in 2016.

PAMPI is composed of 52 members which account for more than P300 billion in annual sales and provide direct and indirect jobs and livelihood to some 300,000 Filipinos.