The government’s revenue losses from the lower pork import tariffs is estimated to reach P5.4 billion by yearend, as it slashed import duties to pull down the retail prices of pork products.
Antonette Tionko, Department of Finance (DOF) undersecretary, told reporters in a virtual briefing that from April to August 13, the government has incurred a loss of P2.52 billion.
“We are projecting a P5.4 billion revenue loss by the end of the year,” Tionko said.
Executive Order (EO) 128, which lowered pork import tariffs to five percent within its minimum access volume (MAV) and 15 percent outside MAV for the first three months, was in effect from April 7 to May 14.
EO 134, which superseded EO 128, set tariffs on pork imports under the MAV to 10 percent for the first three months and 15 percent in the next nine months. For imports outside the MAV, the tariffs are 20 percent for the first three months and 25 percent in the succeeding nine months.
The one-year effectivity of EO 134 began on May 15, 2021.
“Let me just point out, that loss of revenue blunted the growth in the increase in prices of pork. It has really stopped the increase in prices by adding more supply,” Carlos Dominguez, DOF secretary, said in the same briefing this week.
“We are looking at the health of the entire economy and the welfare of the people. It’s worth it to lose some revenues so that people’s food costs are not increased. That’s really the justification of that,” he added.
The price of pork products soared earlier this year following a major supply shortage triggered by the outbreak of the Asian swine fever.
Last July, Dominguez cited estimates by the National Economic and Development Authority which showed a projected savings of P50.1 billion to be gained by consumers from lower pork prices and the subsequent easing of inflationary pressures, which far outweigh the state revenue loss from the temporary tariff cuts.
Meanwhile, Tionko said the government also incurred a revenue loss of P11.39 million from June 2021 to August 13 from the lower tariff rates of rice.
“We are projecting a revenue loss of P40.9 million until May 2022. This is based on EO 135 only,” Tionko said.
EO 135 temporarily reduced the most favored nation tariff rates for rice to 35 percent from 40 percent for in-quota imports and 50 percent for out-quota imports for a period of one year.
“The other one on the rice, in lowering the tariff for non-Asean, it’s just common sense. We are one of the biggest rice buyers in the world and why should we leave it ourselves to buy only from certain people,” Dominguez said.
