Albay Rep. Joey Salceda on Thursday urged President Rodrigo Duterte to reconsider his decision to reduce import duties on pork meat, saying that the government must instead help the domestic hog industry with tariff revenues.
“The price differential between imported pork at around P190 after duties, and the domestic price of around P300-400 a kilo is enough incentive to import. What we need to do is ensure that imports that come in are safe, and that the application process for the in-quota tariff rate is not tedious or expensive,” Salceda said.
“It’s naïve to think that traders will sell at lower prices just because imports are priced more cheaply. They are already pocketing up to 110% in gross margins. What would stop them from just taking more?” he added.
The Chief Executive recently signed Executive Order (EO) No. 128 temporarily lowering tariffs on imported meat from 40 percent to 15 percent for out-quota pork for three months, which will then be increased to 20 percent for the next nine months, while in-quota pork imports are reduced from 30 percent to 5 percent.
The signing of the EO was meant to address the present supply shortage of pork meat due to the African swine fever (ASF) outbreak.
However, Salceda argued that while he agreed that the EO was necessary to lower meat inflation, he believed that lowering pork tariffs will only harm the domestic industry while principally benefiting importers and traders.
“We already know what happens when we do these adjustments. Domestic industry suffers at a higher rate than the price level goes down. We saw that with rice tariffication, where farmers took a bigger price cut for their produce than the average consumer saved in rice prices,” he averred.
The House ways and means chair, whose committee also oversees tariff-related matters, predicted that the government stands to lose P1.9 billion in revenues from the lowering of tariffs, revenues that he said could have been used to improve the local hog industry.
“While I support the overall policy of easing trade to lower consumer prices, we should have precautions to help domestic industry.
“The better answer, I believe, is to use tariff revenues to improve our swine repopulation program and invest in biosafety and better feeding. That way, we can overcome the scourge of ASF, which comes from swill feeding and unsafe imports.
“My problem here is that the domestic industry is not dominated by big businesses. When we hurt the domestic industry, we are hurting small backyard raisers, whose output comprises 71 percent of all swine production in the country,” Salceda explained.
The lawmaker recommended to expand the Minimum Access Volume (MAV), which tariff rate is 10 percent lower than the regular rate, and automatically approve imports as MAV on a first-come, first-served basis.
“We can simplify the procedure, so that whoever comes first gets to use the MAV. That also saves importers money, because there are at least 3 trade barriers directly related to the MAV.
“In the meantime, our policy with the domestic industry should be to do no further harm. We are not so generous with stimulus measures or aid. The least we can do is not to hurt our own sectors,” he said.