Revenue foregone due to lower tariffs at P2.53B
FOREGONE REVENUE following the lowering of tariffs on pork and rice imports this year has amounted to P2.53 billion so far, the Department of Finance said.
The tariff lowering was effected via executive orders (EOs) issued earlier this year as a temporary anti-inflation measure.
Finance Undersecretary Antonette C. Tionko told reporters the government is expecting to forego P5.9 billion in revenue mostly from the pork EO with smaller losses from the rice EO by the time they expire after one year. By the end of 2021 the total is estimated at P5.4 billion.
In May, President Rodrigo R. Duterte signed EO 134 lowering the tariff rates for pork to 10% for three months for shipments within the current minimum access volume (MAV). The rate was set at 20% for shipments falling outside the quota for the first three months. Over the remaining nine months, tariffs were set at 15% for in-quota and 25% for out-of-quota imports.
The government made an initial move to reduce the rates on imported pork in April through EO 128 but this has since been amended by EO 134 after hog growers complained that they risk being swamped by foreign competition.
EO 135, issued in May, temporarily reduced the tariff rates on rice imported from “most favored nation” trading partners to a uniform rate of 35% for both those inside and outside the MAV quota.
The tariffs were lowered in consideration of “the health of the entire economy and the welfare of the people. It’s worth it to lose some revenue so that people’s food costs are not increased. That’s really the justification of that,” Finance Secretary Carlos G. Dominguez III also told reporters.
Inflation eased to a seven-month low of 4% in July, though price growth remained elevated, above the high end of central bank’s 2-4% target range for the year. — Beatrice M. Laforga