MANILA, Philippines — Senators and the executive department faced off on Tuesday in a showdown over President Rodrigo Duterte’s decision to cut pork tariffs and increase imports as each side sought to strike an elusive compromise.
For the first time, Finance Secretary Carlos Dominguez III led the executive branch’s contingent to the upper chamber whose members made known their disgust over the president’s snub of their appeal not to let more pork imports in at cheaper rates for fears they will overwhelm an already struggling industry.
Senators already passed a resolution revoking Executive Order No. 128, but without their House counterparts doing the same, they cannot override the president's EO. They can still do that though as soon as Congress returns to session next month, and Tuesday's hearing was meant to set the way forward.
Legislators basically grilled the economic managers on two things: first, whether it was sensible for EO 128 to jack up pork imports to over 400,000 metric tons from just 54,210 MT originally, and do it while also substantially lowering their tariffs to 5-15% from 30-40%.
In almost all cases, Dominguez justified the move as a response to an “emergency” emanating from tight meat supplies that have threatened to compound pandemic hardships of consumers through expensive prices. Indeed, as official data would show, inflation averaged 4.5% as of March, and 1.4 percentage point of that was contributed by meat alone.
“When the prices rise on the period of 4 months, that is an emergency. If you want to solve the problem quickly, you have to encourage the importation of the material that’s short and in this case it’s pork,” the finance chief said.
But Senator Cynthia Villar, chair of the agriculture committee, was unconvinced, saying that if the goal was to lower retail prices, lifting import blockages would have been enough even without tariff reduction.
Of rice and pork
Senate Minority Leader Franklin Drilon agreed, citing as an example the rice tarifficaton law enacted in 2018 that Dominguez himself said maintained high tariffs of as much as 50% for imported rice, while allowing more shipments in.
"In the RTL, the tariff was maintained. Shouldn’t the same circumstance apply to pork?” Drilon asked. Dominguez, in response, said that unlike rice at the time, pork is battling a sickness, the African swine fever, that has cut supplies tremendously.
This led to a question from the body on how capable the agriculture department is in ensuring that when import gates are opened up, no infected pork will get in. Agriculture officials were initially hesitant to commit, before getting prodded by Senator Ralph Recto.
Recto, himself a former socioeconomic planning secretary, also butted heads with Dominguez as to the P13 billion estimated revenue losses from lower pork tariffs, which the finance chief said would be a small price to pay to alleviate consumers' bout with inflation. And then Recto went on to ask why the hefty increase in pork import level.
Dominguez responded: “Nobody is forcing people to import 400,000 MT and that is just the gate. If there is no demand as they claimed, the pork will not come in. Believe me.” But Recto disagreed. “But that’s an incentive, Mr. Secretary. You are essentially giving people the incentive to import.”
Keeping an open mind
Data discrepancies in pork supply between the industry and the government were also tackled at the hearing. Initially, Socioeconomic Planning Secretary Karl Kendrick Chua tried to defend the government’s own tally by saying it is the “official” data from state statisticians, but Senate President Vicente Sotto III was not satisfied.
“The problem is those doing the data are just sitting behind the table without looking into what is happening on the ground,” Sotto said.
Currently, Customs Commissioner Leonardo Guerrero said his agency had already started charging lower tariffs under EO 128, but Agriculture chief William Dar said the current minimum access volume is still being observed, awaiting further orders from the Palace.
For Dominguez, what the government is only asking is from legislators is to give their chosen importation policy more time to see if they work.
“My mind is open. We always make judgements based on evidence,” he said. “We are asking for time to see this thing work and if it doesn't work, I am not one who is married to this idea and if there are better ideas out there I am open to that.”