Meat firms back extension of import levy on agri products

MANILA, Philippines - The Philippine Association of Meat Processors Inc. (PAMPI) and the Meat Importer and Traders Association are seeking the retention of import levy on agricultural products.

The Department of Agriculture plans to seek the extension of Executive Order 190 that imposed tariff rates on agricultural imports due to the expiration of the rice quota waiver on June 30.

The expiration of the QR would result in the restoration of the 40 percent duty on mechanically deboned meat (MDM), the raw material used in making processed-meat products.

Meat stakeholders said the impending removal of rice import quotas would increase the production cost of processed-meat manufacturers, which would eventually trickle down to consumers.

“Any change in the cost structure of this product will severely impact a lot of consumers. It will also significantly affect the operations of cold storage facilities, so the economic magnification of any drastic change in this tariff structure is huge,” MITA president Jesus Cham said in a public hearing.

PAMPI executive director Francisco Buencamino said if the MDM tariff would be returned to 40 percent, prices from supplier to outlets would have to increase by 12 to 17 percent and even higher when it reached the consumers.

The government requested the country’s trading partners to restrict the entry of imported rice. As part of the concession for the extension of rice quota, the Philippines lowered its tariff on MDM to five percent.

Starting July 1, the Philippines would have to restore its tariff on MDM to the original rate of 40 percent.

Former Trade undersecretary and now Laban Konsyumer Inc. president Victor Dimaguiba said President Duterte would have to issue an EO to direct the Bureau of Customs  to not  apply the 40 percent duty once the waiver expires.

“The time clock ends June 30, that’s the default. We have to brace for higher prices. We need an EO directing Customs to not apply the 40 percent duty,” he said.

“We have to be as quick as possible because if a new EO will have to be issued, that has to be issued before July 1. That’s the instrument that BOC needs to implement the new rates,” Tariff Commission chairperson Marilou Mendoza said.

The Commission is giving stakeholders until Feb. 24 to submit their position papers.

Despite the coming deadline for the Philippines to lift the QR on rice, the Agri chief believes it would be impossible to implement this unless the two chambers of Congress pass the bills amending the Tariff Code.

Piñol said he was counting on the reluctance of congressmen and senators to pass a new law amending the Tariff Code.

“Even if the QR will be lifted by June 30, there will not be unregulated importation of rice without the implementation of the amendment to the Tariff Code,” the Agri chief said.

Through the QR, the Philippines imposes a high tariff of 35 percent on imported rice, the volume of which has been restricted to 805, 200 metric tons (MT).

Importing outside the QR is even more expensive as inbound shipments would be levied a duty of 40 to 50 percent. – With Catherine Talavera