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NEDA backs DA pork price caps to head off possible inflation rise

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Image via Flixtey / CC BY-SA 4.0

THE National Economic and Development Authority (NEDA) is supporting the recommendation of the Department of Agriculture (DA) to impose a price ceiling on pork while increasing the volume of imports for lower tariffs to prevent potential spike in inflation.

“We support the proposal of the DA; in fact, the committee on trade and related matters endorses it but it will have to go through the proper process under the CMTA (Customs Modernization and Tariff Act) law, and the Tariff Commission is going to immediately conduct consultations and the due diligence,” NEDA Acting Secretary Karl Kendrick T. Chua said in an online briefing Thursday.

Mr. Chua made the remarks after being asked about NEDA’s position on the DA’s proposed measures to curb the rising price of pork.

Agriculture Secretary William D. Dar said in a Monday briefing that the DA is proposing an executive order to President Rodrigo R. Duterte which will set a price ceiling on pork and chicken in Metro Manila for 60 days. Mr. Dar blamed the rising prices on manipulating by traders.

Mr. Dar said the DA is also looking into raising the minimum access volume (MAV) threshold for imported pork products to 162,000 metric tons (MT), from 54,000 MT currently.

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This means more imported pork will be charged lower tariffs. Imports within the MAV will pay 30%, while those above the MAV will be charged 40%.

“Our priority right now is to ensure that food supply is adequate so that households who have been affected by the COVID-19 (coronavirus disease 2019) quarantines will not be doubly affected by possible further spikes in inflation,” Mr. Chua said.

According to a joint report by the FMIC & UA&P Capital Markets Research released Thursday, “inflation may only rise a little faster in 2021 as we expect food prices to fall in Q1, bringing down the average inflation for that quarter to 3%. It will remain there or lower towards the end of the year.”

It attributed the rise in inflation in December to higher food prices, especially pork. Headline inflation accelerated to a 22-month high last month of 3.5%, bringing the full-year average to 2.6% for 2020.

“We view the spike in food prices as abnormal and we expect these to fall as Q1-2021 unfolds,” according to the joint report.

Benjamin R. Punongbayan, chairman and founder of Buklod National Movement, which has a good-governance advocacy, warned that the suggested price freeze will not address the ongoing shortage of pork.

Mr. Punongbayan said setting a price cap will only cause the supply to further dwindle with traders expected to continue hoarding while they are unable to realize profits from the prevailing retail price.

“The immediate solution is to liberalize the importation of meat, particularly hog meat,” he said.

A longer-term solution is for the government to help hog farmers ramp up production via lending programs and the procurement of breeding stock. — Beatrice M. Laforga

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