Advocacy group Foundation for Economic Freedom (FEF) is urging the government to extend and expand Executive Order (EO) No. 171 s. 2022 that reduced tariff rates on pork, corn, rice and coal until the end of the year.
The group said in a statement the original bases for reducing tariff of said items during the issuance of the EO in May this year remain relevant to date and have further aggravated.
Without extending or expanding the EO, tariff rates for such commodities are set to return to their higher rates by next year.
“It is arguable that conditions have aggravated since the passage of EO 171, with inflation now hovering just short of 7 percent versus the 4 percent level back in May 2022. In the backdrop of all of these is a weakening economy and higher interest rate environment, which will cause sluggish economic recovery into at least 2023,” the group said.
FEF added that stabilizing the prices of such commodities through the entry of cheaper imports will help temper inflationary pressures especially that higher prices hurt the poor the most, while borrowers have to pay higher interest costs as entrepreneurs shoulder greater production and marketing costs.
“Although agriculture’s contribution to the gross domestic product (GDP) is only around 10 percent, the food manufacturing industry depends highly on agriculture for its raw materials. Taken together, both agricultural and the food manufacturing industries contribute around a third of our total GDP. In addition, around 50 percent of our manufacturing sector is agriculture- and food-based,” FEF said.
The group also said taming prices of agricultural and food products will not only ensure access of consumers to affordable food, but also enable the food industry to be efficient and competitive and capable of generating more jobs.
Earlier, the Meat Importers and Traders Association (MITA) urged the government toissue an EO that will further lower pork import tariff, citing the need to assure security in the supply and prices of food in the country.
MITA wants President Ferdinand Marcos Jr. to adjust duty rates on pork to 5 percent for in quota shipments and 15 percent for out quota shipments for a duration of five years through an EO.
At present, because of EO 171 issued by the previous administration, duty rates on pork for in quota shipments are at 15 percent and 20 percent for out quota shipments until the end of the year.
EO 171 also lowered tariffs of in quota and out quota rice to 35 percent from 40 percent and 50 percent, respectively, while tariff for coal was temporarily removed.
At the same time, EO 171 lowered tariff of corn to 5 percent for in quota from 35 percent and to 15 percent for out quota from 50 percent.
However, FEF said the government must adjust the tariff for both in quota and out quota corn at 5 percent especially that the current corn minimum access volume is only at 216,940 metric tons (MT) which is not sufficient to tame domestic corn prices.
The group noted a local corn supply deficit of 3 to 4 million MT. Corn is a major input to produce animal feeds.
Meanwhile, the Department of Agriculture (DA) said it will look into the reason for the lower volume of vegetables being delivered to Metro Manila which is pushing up prices in markets.
Kristine Evangelista,DA spokesperson, said in an interview yesterday the agency will verify whether the scenario is due to the effects of Typhoon Karding. She also said it is hard to issue a suggested retail price (SRP) for vegetables despite the situation.
“We are now looking at the inflow of vegetables from trading posts to Metro Manila. We observed a lessened volume being brought to Metro Manila. We will look at transactions in trading posts, but we also have to look into our production since there are produce that were hit during the recent typhoon,” Evangelista explained.
However, she did not cite exact figures for the lower volume of deliveries to Metro Manila, saying the DA is currently looking for more sources of vegetables from other regions to influence prices.
Despite the scenario, she clarified that the lower supply of vegetables brought to Metro Manila does not mean the same is true for the entire Luzon. “The inflow to Metro Manila is not necessarily a reflection that production is insufficient,” Evangelista said.
She added that implementing SRPs for vegetables can be challenging as the pricesshould at least be in effect for 60 days. Prices of vegetables have historically been volatile not only in markets but also in trading posts.
Earlier this week, the DA issued an administrative circular putting in place an SRP for medium-sized red onions in wet markets in the National Capital Region (NCR) at P170 per kilogram that will remain in effect for at least 60 days.
Last month, Domingo Panganiban, DA senior undersecretary, warned that prices of rice and vegetables may increase by 15 to 20 percent due to the damage brought by Typhoon Karding in agriculture.
Based on DA’s count as of October 3, Typhoon Karding’s damage to the entire agriculture sector amounted to P3.12 billion, of which P2.05 billion accounted for rice crops and P831.29 million for high value crops including vegetables.
DA’s monitoring of public markets in NCR showed that prevailing retail prices as of yesterday for lowland vegetables per kg is at P140 for ampalaya; pechay Tagalog, P120; string beans, P115; eggplant and tomato, P100; and squash, P50.
For highland vegetables, per kg retail prices is at P140 for Baguio beans and carrots; P80 for cabbage and white potato; P60 for pechay Baguio; and P40 for sayote.
