Government foregoes P4 billion from pork tariff cut

MANILA, Philippines — The government has forfeited nearly P4 billion in revenue from the reduced tariff on pork imports and may incur more losses with the entry of new shipments to fill in the shortage in local supply.

Based on data from the Bureau of Customs, the government collected a total of P19.35 billion in duties from the importation of meat swine, whether fresh, chilled or frozen, between April 9 and Dec. 10.

During the period, executive orders (EO) are in place bringing down the tariff on pork imports in an effort to increase domestic supply and, in the process, reduce retail prices.

However, the government also lost P3.68 billion in revenues from the lowering of pork duties. More than 64 percent of the losses at P2.37 billion were sustained from imports outside of the minimum access volume (MAV), while the other 36 percent at P1.31 billion were incurred from the arrival of within MAV shipments.

Finance Undersecretary Antonette Tionko said the government expects losses to hit P5.4 billion from trimming import duties on pork. Nevertheless, the tariff cut will be maintained to make sure that prices are kept within affordable levels during the pandemic.

In April, President Duterte issued EO 128 bringing down the tariff on pork to five percent from 30 percent within the MAV, and to 15 from 40 percent outside of the MAV.

The President then issued EO 134, superseding EO 128, raising the rates to 10 percent on MAV imports and 20 percent on non-MAV shipments for the first three months upon effectivity.

For the succeeding nine months, the tariffs will jump to 15 percent for pork within the MAV and 25 percent for outside the MAV, and will return to their original rates when the EO lapses in May next year.

Duterte approved the EO heeding the economic team’s warning that the Philippines may suffer from a shortage in pork supply due to the African swine fever. Without the presidential directive, economic managers had warned that inflation may spike if pork demand overwhelms supply for an extended period.

Likewise, the Chief Executive expanded the MAV for pork imports to 254,210 metric tons (MT) from 54,210 MT. According to the Department of Agriculture, the country is seen to experience a supply shortage of at least 388,790 MT this year.

Finance Secretary Carlos Dominguez III, for his part, had said the government could absorb the revenue losses for as long as the tariff reductions prevent price hikes on pork.