During a Tariff Commission hearing on Monday, agricultural producers argued that the government’s decision to maintain low tariffs on rice, pork, and corn imports has resulted in the loss of billions of pesos in revenue.
The National Manager of the Federation of Free Farmers, Raul Q. Montemayor, stated that the decrease in income caused by the low tariffs does not bring any advantages, especially for programs that are specifically supported by these import taxes.
According to Mr. Montemayor, the low-tariff regime expansion to grain suppliers from outside the trading bloc has not resulted in a significant increase in imports or affected retail prices from non-ASEAN countries.
“We have lost an amount of more than P1 billion in the process, with the majority of it going to the profits of importers and traders. This money should have been used to support our rice farmers in dealing with the increasing costs of production,” he stated.
Previously, rice from ASEAN countries could enter the Philippines at a lower tariff of 35%, in accordance with trade agreements. In contrast, the tariffs for rice from other sources were significantly higher.
During Duterte’s presidency, a temporary executive order was implemented to make the tariff treatment of ASEAN and non-ASEAN rice equal in order to contain inflation. The same order also included a provision for reduced tariffs on corn and pork.
Last year, President Ferdinand R. Marcos, Jr. signed Executive Order No. 10 which extended the low-tariff period until December 31, 2023.
The NEDA Secretary, Arsenio M. Balisacan, stated that a joint committee has proposed extending the low-tariff system due to the high cost of three commodities in the global market.
In the previous month, Mr. Marcos declined a suggestion to decrease tariffs on rice even more, citing the stabilization of global prices. NEDA had suggested reducing tariffs to as low as 0%.
During the hearing, Nicanor M. Briones, the chairperson of the Pork Producers Federation of the Philippines, also contended that the decreased pork tariffs could have been utilized to support the hog industry instead.
He stated that the existing tariff system has resulted in a decrease in profits for hog farmers, as they face competition from imported pork.
The tariff rates for pork were established at 15% for shipments that fell under the minimum access volume (MAV) quota and 25% for those that exceeded the quota.
Mr. Briones stated that the government has lost approximately P8.4 billion in revenue, which could have been used to assist hog farmers in their fight against African Swine Fever (ASF).
According to the Department of Agriculture, the amount of locally produced pork is expected to fall short by the equivalent of 10 days’ worth of demand in the fourth quarter due to increased consumption during the holiday season.
Artemio M. Salazar of the Philippine Maize Federation, Inc. commented that the suggestion to prolong reduced corn tariffs lacks thorough examination of the corn production’s seasonal patterns and its impact on corn farmers.
At present, the tariffs for corn are 5% for those within the quota and 15% for those who exceed it.
The Tariff Commission is currently considering the potential expansion of the low-tariff system for three specific commodities, as requested by economic management.
According to a statement signed by Finance Secretary Benjamin E. Diokno and Mr. Balisacan, this could allow importers and traders to vary their sources of imports to countries outside of ASEAN that may provide a more competitive price for the commodities.