Duterte keeps 5% tariff on deboned meat imports

By Revin Mikhael D. Ochave, Reporter

THE PHILIPPINE government kept the tariff on imports of mechanically deboned meat (MDM) of chicken and turkey at 5% until end-2022.

President Rodrigo R. Duterte signed Executive Order (EO) No. 123 on Jan. 15, which retained the most favored nation (MFN) tariff rates on chicken and turkey MDM imports until Dec. 31, 2022. A copy of the order was released on Monday.

“It is necessary for the government to provide an enabling environment that ensures the continued supply of essential food products at stable prices, helps businesses recover and sustain their operations, and preserves and creates employment opportunities, all for the purpose of supporting the economy in bouncing back and resuming its growth momentum,” the order stated.

EO No. 82, which reduced the tariff rate for MDM imports to 5% from the previous rate of 40%, expired on Dec. 31, 2020.

“This is a decision of the Tariff Commission to maintain the low price of processed products much more when the pandemic is still here,” Agriculture Secretary William D. Dar said in a mobile phone message.

The Cabinet Committee on Tariff and Related Matters, co-chaired by the Trade department and the National Economic and Development Authority (NEDA) had recommended the retention of the tariff at 5%.

In a separate statement on Monday, Trade Secretary Ramon M. Lopez said the new executive order would help keep costs down for local processed meat manufacturers and avoid big price increases of canned and processed meat products amid the pandemic.

“There is no need to increase the tariff to 40% because there are no local producers to protect. Since MDM is a main cost component in low-priced canned and processed meat products, any tariff increase will only lead to the inflation of cost and prices of most canned meat products that are also part of basic goods in our SRP,” Mr. Lopez said.

MDM is a raw material used in processing low-priced canned goods.

“These products are what the majority of the Filipino consumers buy, and during these challenging times, we want to ensure that their access to these basic goods will not be affected by tariffs and price increases,” Mr. Lopez added.

Philippine Association of Meat Processors, Inc. (PAMPI) President Felix O. Tiukinhoy, Jr. said the decision to retain the tariff rate on MDM would help producers of processed meats such as hotdogs and sausages.

“MDM is not locally produced. Canned products using MDM are among the ‘must’ items in relief food packs that are produced by PAMPI members and distributed by government agencies to our people during national emergencies arising from natural calamities or disease outbreaks,” Mr. Tiukinhoy said.

Meanwhile, Samahang Industriya ng Agrikultura (SINAG) Chairman Rosendo O. So said it is “unfortunate” that the Philippine government has opted to forfeit possible revenues.

In a statement, Mr. So said the possible revenues from higher tariffs could have helped the government’s effort in giving free coronavirus disease 2019 (COVID-19) vaccines for the local agriculture sector.

“Kung sino pa ang nasa harapan ng laban sa COVID-19, ang mga lumilikha ng pagkain sa ating hapag kainan, sila pa ang napabayaan, (People who are included in the frontlines on the country’s battle against COVID-19, those who make food, they are the ones still left out,)” Mr. So said.

SINAG recently said the Philippine government can earn an additional P5 billion in revenues, which could be used to vaccinate local farm workers if the 40% tariff on chicken MDM is implemented.

“MDM importation last year was (at) 254 million kilograms, at an average of P50 per kilogram. Reverting to the 5% tariff will deprive the government of much needed revenues,” SINAG said.

The group added that consumers will only need to pay an additional P1.20 for a 350-gram luncheon meat and an increase of P0.53 for a 150-gram meat loaf.

For Jesus C. Cham, president of the Meat Importers and Traders Association (MITA), the executive order should last five years, instead of two.

“Processors will have to go through this again after two years, expending needlessly valuable energy and resources. A realistic assessment would show that the Philippines will not be able to produce MDM competitively in the next 5 years,” Mr. Cham said in a mobile phone message.