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HomeCustoms & TradeSenate seeks scrapping of EO on pork tariff

Senate seeks scrapping of EO on pork tariff

  • The Senate adopted a resolution urging President Rodrigo Duterte to withdraw an executive order temporarily cutting import duties on swine meat for one year
  • The resolution unanimously adopted during an April 15 hearing also urges Duterte to recall his recommendation to increase the minimum access volume (MAV) of pork imports
  • Congress can terminate EO 128 through a joint resolution
  • The proposal to increase MAV cannot take effect because it was sent to the Senate when it was not in session, according to the resolution

The Senate Committee of the Whole has adopted a resolution urging President Rodrigo Duterte to withdraw an executive order (EO) temporarily reducing import duties on fresh, chilled, or frozen swine meat for one year.

The resolution, authored by Senate minority leader Franklin Drilon and unanimously adopted during an April 15 hearing, also urges Duterte to recall his recommendation to increase the minimum access volume (MAV) of pork imports.

READ: Solons eye revocation of EO cutting meat import tariff

During the hearing, the Senate committee asserted that “the power to fix tariff rates and import quotas fall within the realm of the power of taxation, a power which is within the sole province of the legislature under the Constitution.”

Drilon said that under the country’s system of laws, “the setting of the MAV and the power to set the tariff rates are the functions of Congress.”

“The exercise of the President of the power to increase the MAV and to lower the tariff are delegated authorities of Congress which may be withdrawn or terminated by Congress through a joint resolution,” Drilon pointed out.

READ: Duterte signs EO lowering tariff for pork imports

EO 128, which was signed on April 7 while Congress was in recess, reduces the most-favored nation (MFN) tariff rate on pork imports within the MAV from the current 30% to 5% for the first three months upon effectivity of the order, and to 10% for the fourth to 12th month.

Pork imports outside the MAV will be slapped a lower tariff of 15% for the next three months and 20% for the succeeding nine months from the current 40%.

According to EO 128, there is “an urgent need to temporarily reduce” the MFN tariff rates on fresh, chilled or frozen meat of swine to address the impact of the African Swine Fever (ASF) outbreak on pork meat supply and price in the Philippines.

Last March 26, the last day of Congress’ session, Duterte also submitted his proposal to Congress to increase the MAV for pork imports to 350,000 metric tons (mt) from 54,000 mt.

Botcha policies
Drilon said the two policies “can potentially spell the demise of our local hog industry, most of them belong to what we call backyard hog raisers.”

Calling the two policies “botcha” (double-dead meat), he urged their immediate recall.

“The small hog raisers will not be able to fight the big importers of meat products,” Drilon earlier said.

The resolution also believed that the proposal to increase the MAV cannot take effect because the recommendation was sent to and received by the Senate when it was no longer in session.

It noted that Section 6 of Republic Act No. 8178, or the Agricultural Tariffication Act, provides that the President’s recommendation to revise, modify or adjust the MAV in case of shortages or abnormal price increases in agricultural products, is deemed approved if Congress fails to act after 15 days from receipt.

However, the section does not apply in this case because the President’s recommendation was sent to and received by the Senate when it was no longer in session and thus couldn’t act on the recommendation.

The resolution also hit the Department of Agriculture (DA) for its alleged failure to satisfactorily establish through accurate and reliable data that the country would have 388,790 mt of deficit in supply of pork for the year which necessitates the increase in MAV.

The resolution stated that based on the testimonies of the resource persons during the first hearing of the committee, there is reasonable basis to conclude that the new set of tariff rates and the huge increase in the MAV can destroy the local hog industry and cost billions in foregone government revenue. It was reported in the media that the foregone revenue could reach up to P11 billion.

NEDA backs MAV increase
Acting Socioeconomic planning secretary Karl Kendrick Chua, in a speech during the committee hearing, said the National Economic and Development Authority (NEDA) “supports the temporary increase in the minimum access volume or MAV coupled with lower tariffs to help fill the deficit, reduce food prices, and ensure our food supply is adequate and affordable.”

Chua said that according to the Philippine Statistics Authority’s Swine Situation Report as of February 8, 2021, the country’s swine inventory decreased by 3 million heads or 24% from 2020 to 2021 due to the ASF outbreak.

“Our projected carcass pork deficit for 2021 is around 477,000 metric tons. This is the difference between domestic production of carcass of around 1.2 million metric tons and the demand of around 1.67 million metric tons, based on a 15-kilograms per person per year consumption. On the other hand, total demand is estimated at 1.67 million metric tons in 2021,” Chua said.

He said the proposal to increase the MAV for pork imports “is consistent with the supply deficit estimated by NEDA,” adding that the temporary increase in pork imports will not “kill” the local hog industry, as imports would potentially account for up to 22.8%.

He said the tariff rate for pork “also needs to be low enough to help reduce and stabilize retail prices.”

Chua explained that “if we lower the tariff rate temporarily to 5 to 10%, that would lead to lower landed cost of around P215 to P222 per kilo, closer to the pork retail price.”

“Compared to the high end of the pork price ceiling of P350 per kilo in March and April 2021, the lower tariff rates of 5% to 10% can translate to lower retail prices by 128 to 135 pesos per kilo,” Chua noted.

The bipartisan resolution was co-authored by Senators Vicente Sotto, Ralph Recto, Juan Miguel Zubiri, Juan Edgardo Angara, Nancy Binay, Pilar Juliana Cayetano, Leila De Lima, Ana Theresia Hontiveros, Manuel Lapid, Panfilo Lacson, Sr., Maria Imelda Josefa Marcos, Emmanuel Pacquiao, Francis Pangilinan, Grace Poe, Richard Gordon, Ramon Revilla, Jr., Joel Villanueva, and Cynthia Villar.

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