TC urged: Hike pork tariffs to cut importers’ profit
AFEW days before the President can modify tariffs on pork imports, an industry group wrote to the Tariff Commission (TC) to propose an increase in pork tariffs to as much as 44 percent to “shave off” importers’ profit take and boost the country’s revenue.
In a letter submitted to TC Chairperson Marilou P. Mendoza, the Samahang Industriya ng Agrikultura (Sinag) explained their proposal to increase the current in-quota tariff for pork imports from 30 percent to 40 percent and out-quota rates from 40 percent to 44 percent.
In its letter dated March 23, a copy of which was provided to the media, the group claimed that “importers are raking profits at the current tariff rate with no corresponding reflection on the retail price of prime pork cuts.”
Citing Bureau of Customs (BOC) data, the group said the landed cost of pork belly and kasim is at P81 per kilogram from January 2020 to 2021. The group argued that at these prices, importers are making P200 to P250 per kilogram since retail prices of pork belly and kasim is at P350 to P1400 per kg.
“As late as January to February this year [2021], when retail prices of local pork spiked, imported pork was being sold between Php 350-450/kilo. Importers claim that they are not violating any law and are just following the retail price of pork,” the letter read.
The group argued that increasing the tariff rates would mean higher revenues for the government, especially since the Duterte administration’s economic blueprint is “anchored on additional government funds to support its accelerated spending” for infrastructure and social services programs.
“Reducing tariffs will deprive the government of much needed revenues. Revenues that would support the Covid-19 vaccination program and efforts to help the livestock industry recover from the African Swine Fever [ASF] pandemic,” it added.
Petition on hold
TC Chairperson Mendoza responded to the group’s letter, saying that they are “constrained” to put the tariff hike petition on hold until the current petition made by the DA to lower pork tariffs is resolved.
The DA earlier petitioned the TC for the lowering of pork tariffs to as low as 5 percent.
The Cabinet-level Committee on Tariff and Related Matters has submitted to President Duterte its draft executive order for the tariffs for in-quota imports to 5 percent and 15 percent for out-quota volume for three months.
The rates would subsequently increase to 10 percent (MAV) and 20 percent (outside MAV), respectively, for the duration of nine months.
“Once a final action on the said petition is issued, this Commission will provide you with the necessary information on how to proceed with your petition,” Mendoza’s letter to Sinag read.
President Duterte can exercise his tariff modification powers as soon as Congress suspends session on Saturday (March 27).
‘Tackle both petitions together’
IN a separate letter sent to Mendoza on Thursday, the agriculture group said they want their petition to be “tackled at the same time” as the DA’S petition since the tariff structure of pork commodities “is anyway already under review.”
“The whole agriculture sector is awaiting the verdict of the Tariff Commission as this will impact on the lives of millions who depend on the hog industry,” the group’s letter read.
Under Section 1608 of the Customs Modernization and Tariff Act, any interested party, including domestic manufacturers, importers, exporters, customs brokers, and government agencies may file a petition for tariff modification before the TC.
TC rules state that a petitioner is required to accomplish TC Form 3 which is publicly available and downloadable from the body’s web site in order to file a formal petition.
If the petition is found to be “meritorious under 1608,” then the petitioner must pay a P5,000 filing fee per tariff heading, which is collected prior to the conduct of public hearing, according to the TC. Furthermore, a legal research fund fee of P50 per tariff heading is also collected from the petitioner, based on TC rules.
“Petitioners also share in the publication cost of TC’S Notice of Public Hearing [which is published in two newspapers of general circulation]. A petitioner’s share in the publication cost is based on the number of products he is petitioning for tariff modification and subject of the public hearing,” the TC said.