AO 20 to drive down food costs — solon

The newly signed Administrative Order 20, eliminating non-tariff barriers on the importation of agricultural products into the country, will certainly drive down the costs of food, which slightly shoot up in March, economist-lawmaker Joey Salceda said Sunday.

The Philippines has among the highest rates of protection for its domestic goods, with a protection level of around 27 percent as a share of farm receipts across all agricultural goods, making it difficult for exporters to sell food into the country, according to Salceda, chairperson of the House committee on ways and means.

"With such levels of trade protection, we should not be surprised why food is expensive in the country," he said.

"Such protection levels also do not directly accrue to the agricultural sectors they are supposed to protect. They also incentivize those who can completely disregard the law or corner domestic trade," he added.

Apart from the Rice Competitiveness Enhancement Fund, the veteran solon claimed that no extant mechanism exists to support the domestic sector directly through tariff revenues.

"We hurt consumers with high trade barriers, but we also do not support farmers directly with tariff revenues," Salceda said.

The lawmaker forecasted that the AO, signed by Executive Secretary Lucas Bersamin on 18 April but made available to the media only on Sunday, will poke holes in speculative bubbles in the price of fish, which has high levels of non-tariff protection, such as the Certificate of Necessity to Import.

"If implemented fully by the DA (Department of Agriculture), it will open sugar imports to direct industrial users. That could end the stagnation of the food manufacturing sector," added Salceda, noting that sugar prices in the Philippines remained the highest than those of its neighboring countries in the ASEAN.

Based on the AO, non-tariff barriers inflate the costs of farm goods in the United States.

Non-tariff barriers, other than customs tariffs, restrict trade, including quotas, import licensing systems, regulations, and red tape.

The AO orders the DA and the Departments of Trade and Industry and Finance to undertake immediate measures to remove administrative constraints and non-tariff barriers and further streamline procedures and policies regarding importing agricultural products.