President Duterte is standing pat on his decision to allow the importation of pork at lower tariff, saying this is a “temporary” measure to stabilize the supply and price of the meat.
But the President on Monday night said Executive Order (EO) 128 can always be withdrawn.
Presidential spokesman Harry Roque said Congress could revoke the EO through a legislative act which Duterte will respect and follow.
But for now, “the President is standing by the decision of his economic managers and the DA to import 400,000 metric tons through MAV at a lower tariff,” he said.
Duterte said the issuance of the EO is supported by the economic managers, particularly the Department of Agriculture (DA).
Under the EO, tariff on pork within the minimum access volume (MAV) quota is lowered to five percent in the first three months and is raised to 10 percent in the succeeding nine months before it reverts to 30 percent after a year. The tariff rate on pork outside MAV is lowered to 15 percent in the first three months and increased to 20 percent in the succeeding nine months, before it reverts to 40 percent after the 12th month.
DA Secretary William Dar also on Monday night said as early as February during a Cabinet discussion, he reported a projected pork shortage of 388,000 metric tons (MT)
Acting Planning Secretary Karl Chua said the food inflation went up to 6 percent in February and March this year from 2.7 percent in the same period last year due to the problem with the pork supply.
Chua said if the issue is not addressed, inflation this year could go up to 4.2 percent or higher than the target range of 2 percent to 4 percent.
By implementing the importation of pork at lower tariff, inflation can go down to 3.8 percent.
Senators called for the withdrawal of EO 128 which they said could kill the local hog industry. They said they will issue a joint resolution against the EO.
Finance Secretary Carlos Dominguez in a statement yesterday said the recommendation to lower tariff and raise the MAV quota that led to EO 128 was made by him and the Economic Development Cluster (EDC), after extensive deliberations and consultations, with all the tradeoffs considered in the cost benefit analysis .
In a letter addressed to Senate President Vicente Sotto III dated yesterday April 20, 2021, Dominguez said as chairman of the Cabinet’s EDC, he was taking full responsibility for supporting and recommending that the President sign EO 128.
“Elevated pork prices will add another problem to households whose incomes have already been heavily strained by the COVID-19 pandemic. With African swine fever (ASF) raging through farms for almost two years, data show that domestic supply will remain inadequate for the needs of consumers,” Dominguez said in the letter.
Contrary to misperceptions, the DA does not intend to rely on importation alone to solve supply issues in the long haul, Dominguez said.
“Even with increased imports, a large part of domestic demand is expected to be covered by domestic production, which the DA will aggressively support with improved implementation of its hog production assistance and repopulation program,” he said.
Dominguez said the proposed pork import program will only cover 22.8 percent of total domestic consumption.
“To allay the fears of our local hog raisers, the MAV Management Committee can also issue additional rules and regulations for the MAV allocation to be subject to a quarterly review as an additional measure to avoid imported pork flooding the market and depressing local prices below profitable levels,” Dominguez said.
Meanwhile, in a separate statement, DOF said the Land Bank of the Philippines (Landbank) is raising its available loan window in support of local pork producers and feed millers to P30 billion, from P15 billion, to finance stock repopulation and feed milling operations of stakeholders reeling from the adverse impact of the ASF.
This will help address at the soonest the supply shortfalls and subsequent retail price spirals affecting both hog producers and pork consumers, Dominguez said.
The funds will be available under the Landbank Special Window and Interim Support to Nurture Hog Enterprises Lending Program for commercial hog raisers registered as cooperatives or farmers’ associations, small and medium enterprises, and large enterprises or corporations.
The lending program will be available until Dec. 31, 2026 in support of the DA’s hog re-population plan.
In a statement, Senate minority leader Franklin Drilon said the DA cannot raise the MAV on pork unilaterally as this requires congressional action.
“Congress, where the power to set import quotas lies, should be given the chance to act on the proposal to increase the MAV on pork imports… To implement it without waiting for Congress to resume session and deliberate on the proposal is illegal, not to mention it is a total disrespect to a co-equal branch,” Drilon said.
He added Congress has provided a procedural framework through Agricultural Tariffication Act on how the President can fix MAV quotas.
Drilon said under Section 6 of the law, 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.
He said President Duterte’s letter recommending the increase was received when Congress was on a break.
Congress will resume session on May 17.
Drilon said the Senate is also keen on withdrawing the authority of the President under EO 128 to set the tariffs.
Drilon said the DA’s justification in recommending the EO is based on “exaggerated” projections that there is a shortfall of over 380,000 MT of pork for the year whereas a 10-year historical data from the same agency only implies the gap is only about 125,000 MT. Samahang Industriya ng Agrikultura expressed optimism the tariff cuts on imported pork will be revoked when Congress hears the issue next month.
The group said in a statement any pork shortfall can be imported at the current tariff level, as even at current rates of 30 percent, importers already earn a profit of P200 to P250 a kilo. (J. Montemayor, A. Celis and J Macapagal)
