Palace, lawmakers backchannel on pork tariffs

MANILA, Philippines — Malacañang and leaders of Congress are quietly working on a compromise over the much-criticized move of President Duterte to lower tariffs and raise the minimum access volume (MAV) for pork, senators said yesterday.

There are ongoing negotiations between senators and administration officials on the possibility of the issuance of a new executive order that would possibly temper or do away with the tariff reductions and the increase in MAV to levels that lawmakers and local hog raisers said would not lead to the collapse of the industry while addressing pork supply shortage.

Senate President Vicente Sotto III confirmed the talks but declined to give details. “It’s between (Finance) Secretary Sonny (Carlos Dominguez) and I,” Sotto said.?Sen. Panfilo Lacson said the ball is in the court of economic managers led by Dominguez, who faced the Senate committee of the whole inquiry on Tuesday to defend Duterte’s Executive Order 128 that reduced pork import duties to as low as five percent and the move to raise MAV to 400,000 metric tons (MT).

“The question should be directed to the economic managers who recommended to the President the controversial EO 128 and the unreasonable increase in the MAV of pork which the hog raisers, both big and backyard, insist would kill the local hog industry,” Lacson said when asked about the prospect of the informal talks.

“As a matter of fact, as we speak, some backchanneling efforts are underway to work on that compromise,” he said. “Hopefully, we can find a middle ground that will bring out a win-win solution, or terms that are acceptable to all parties concerned.”

Senate Minority Leader Franklin Drilon also disclosed that a compromise is being worked out between Malacañang and congressional leaders.

Under the EO, the tariff on pork imports under MAV quota is reduced to five percent for the first three months of the order’s validity and to 10 percent for the fourth to 12 months.

For imports outside the MAV, the duty is reduced to 15 percent on the first three months, and 20 percent for the fourth to 12th month of EO’s effectivity.

Local hog raisers said they are not opposing raising the MAV to address the shortfall, which is limited to Luzon only, but only to around 100,000 MT, a figure initially proposed by experts at the Department of Agriculture (DA).

Excess cheap imported pork would likely spread to the Visayas and Mindanao, which both still have surplus production and are currently augmenting supply in Luzon, they said. If that happens, hog raisers in the Visayas and Mindanao would also collapse, industry representatives told senators during the hearing.

The industry also strongly opposed any reduction in tariffs as importers already profit at least 120 percent in 12 months under the present setup.

During the hearing, Dominguez insisted that EO 128 is short-term and “the only practicable strategy for the current problem.”

However, the finance chief said the economic cluster is willing to consider other solutions from senators and the local hog industry. – Catherine Talavera