PRESIDENT Rodrigo R. Duterte has signed an executive order retaining the 5% import tariff on mechanically deboned meat (MDM) from poultry until 2020 to mitigate the possible impact on prices.

The President signed on June 13 Executive Order no. 82: “Modifying the Nomenclature and Rates of Import Duty on Certain Agricultural Products Under Section 1611 of Republic Act No. 10863, Otherwise Known as the Customs Modernization and Tariff Act.” The Palace released copies of the EO on Monday morning.

The EO states that the “present economic condition warrants the continued application of the reduced rate of duties on certain agricultural products to mitigate the impact of high prices of goods.”

The issuance of the EO was on the recommendation of the National Economic and Development Authority (NEDA) Board, which backed the “maintenance of the tariff rates under EO No. 23 for mechanically deboned meat of chicken and turkey, and turkey meat and offal.”

Meat processors have been awaiting the EO to reverse the recent imposition of a 40% MDM tariff at the borders, which is a return to the 2012 rate. The industry has been operating under the 5% rate for nearly a decade.

The 40% duty was the rate for MDM before the Philippines offered concessions in connection with a second extension on quantitative restrictions on rice imports.

Under the concession, the MDM of trading partners will enjoy entry into the country at a 5% tariff but will revert to the 2012 rate once a law lifting import limits on rice is in place.

The rice tariffication law took effect on March 5.

The EO was in response to the decision of the interagency Committee on Tariff and Related Matters which, on the request for an evaluation by meat processors, decided to retain the 5% tariff on MDM chicken, seeing no direct competition with the domestic poultry industry.

The Philippine Association of Meat Processors, Inc. (PAMPI) said in a statement emailed to reporters on Monday afternoon that the President’s signing of the EO reflects his administration’s “determined efforts to spur the growth of the local manufacturing industry.”

The group added that Mr. Duterte’s action “sends a strong signal to local and foreign investors that the investment climate in the Philippines is fair, attractive and competitive.”

PAMPI Spokesperson Rex E. Agarrado told BusinessWorld via phone that this EO will have no impact on the price of poultry MDM.

“When [they] raised the duty from 5% to 40%, we did not raise our prices. Therefore, because we did not raise our prices from 5% to 40%, sana (I hope) you would understand (if prices do not move)… kasi noong tinaas ‘yon ‘di nga kami nag-adjust (because when the tariffs rose we did not adjust prices)…”

“I think what you should focus on is why the price of chicken and the price of pork today are so high?,” he added. “‘Yun ang question eh (that is the question)… Alam mo ba ang (do you know the price of) pork and chicken today? They are so high. Highest ever,” he said.

He added: “Please don’t expect us to drop prices because when you asked us to pay P400,000 per container, additional, we did not raise our prices, so tama lang siguro na i-stay namin (so it’s only fair to hold prices steady).”

Also asked to comment, Meat Importers and Traders Association, Inc. (MITA) President Jesus C. Cham said in by phone: “It’s a welcome albeit much delayed order which will help keep food inflation in check. However, we would have preferred that reduction be made permanent.”

He also said, “Should the processors now petition TC (Tariff Commission) to maintain 5% duty for 2021-2025? Or should producers petition otherwise? I hear that NEDA will review next year (on a) trajectory to bring (the tariff) back to 40% gradually unless there are new petitions. So it is a short-lived victory for processors and consumers. That’s not good.”

“We still have an outstanding problem about the Bureau of Customs (BoC) collecting 35% retroactively from March 5 until June 13. We hope NEDA will grant our appeal for BoC not to do so,” he continued. — Arjay L. Balinbin with Vincent Mariel P. Galang

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