Newly signed Administrative Order 20, eliminating non-tariff barriers on importing agricultural products, will drive down food costs, which saw an uptick in March, economist-lawmaker Joey Salceda said Sunday.
Salceda said the Philippines also has among the highest rates of protection for domestic goods, at around 27 percent of farm receipts across all goods.
The House Ways and Means Committee chairperson added that this makes it difficult for food suppliers abroad to enter the local market.
“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.”
No mechanism exists to support the domestic sector directly through tariff revenues, apart from the Rice Competitiveness Enhancement Fund he said.
“We hurt consumers with high trade barriers, but we also do not support farmers directly with tariff revenues,” Salceda added.
He sees the AO, signed by Executive Secretary Lucas Bersamin on 18 April but made available to the media only on Sunday, poking holes in the speculative bubbles in the price of fish, which has high levels of non-tariff protection, such as the Certificate of Necessity to Import.
Direct users
“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,” Salceda said.
Non-tariff barriers like quotas, import licensing systems, regulations, and red tape restrict trade. Due to such impositions, sugar prices in the Philippines have remained the highest in Southeast Asia. -
The AO ordered the agriculture, finance, and trade departments to remove administrative constraints and non-tariff barriers and to further streamline agricultural importation procedures and policies.
In line with the AO, President Ferdinand Marcos Jr. ordered the concerned departments to promote the ease of doing business in the country. He said the AO should lower food prices and ensure supply.
The AO noted that administrative restrictions and non-tariff barriers have driven up the prices of farm goods in the United States.
“It is imperative to further streamline administrative procedures to foster transparency and predictability of policies on the importation of agricultural products in order to help ensure food security, maintain sufficient supply of agricultural goods in the domestic market, and improve local production,” Marcos said.
The President specifically wanted to expedite the import licensing processes and reduce the requirements for the same.
Licensing exemption
He also sought to exempt licensed trades from the registration requirements, in cooperation with the Department of Finance or the Department of Trade and Industry.
In addition, he directed the DA to lower or eliminate administrative costs and expedite the importation of specific agricultural products above the approved minimum access volume (MAV), contingent upon consultation with the National Economic and Development Authority’s Committee on Tariff and Related Matters.
MAV refers to a specific quota set by a government to import certain agricultural products at a lower tariff rate. Importing “above the approved MAV” suggests exceeding this quota.
Additionally, the DA was mandated to take proactive measures to enhance the logistics, transportation, distribution, and storage of imported agricultural products, as well as to expedite the processes and requirements for the issuance of Sanitary and Phytosanitary Import Clearances.
Prioritizing the unloading and releasing imported agricultural products was mandated under Section 5 of the AO, subject to the Customs Modernization and Tariff Act and other relevant laws, rules, and bureau regulations.
Marcos ordered all relevant agencies to ensure the full implementation of the AO through the formation of surveillance teams.
The President shall receive a quarterly report through the Office of the Executive Secretary and the Inter-Agency Committee on Inflation and Market Outlook.
