DTI vows to keep 5% meat import tariff

Trade and Industry Secretary Ramon Lopez said that raising tariff on imported meat for meat processing to 40 percent from 5 percent is going to escalate prices of canned goods by as much as 25 percent.

Lopez said keeping the import tariff on inputs low at 5 percent will prevent any price increase in processed meat products such as corned beef, hotdog, sausage, ham, luncheon meat, and bacon.

Lopez told members of the Philippine Association of Meat Processors Inc. (PAMPI) in Puerto Princesa City, Palawan that he will recommend to the Tariff Commission that it maintain the tariff on mechanically deboned meat (MDM) at five percent.

"I share your position on the five percent tariff for MDM. Tariff should not go back to 40 percent. We believe that this keeps the prices [of processed meat products] low, if we will not increase tariff on inputs," he said.

His rough estimate is that if the tariff of MDM goes up to 40 percent from 5 percent, costs and price of canned products will go up by around 25 percent. Assuming a 25 peso canned meat product, price can go up to P31 pesos. “We should not trigger this thing to happen,” he said.

He said the tariff on MDM should be a separate issue from the 40-percent tariff the government plans to continue imposing on imported rice.

“Looking into what is best for the country and people, we should really keep the tariff at 5 percent MDM. If not, we will all see higher major costing for the basic canned meat products that will push up prices of a basic commodity consumed by the mass based market IF we allow a major input to have higher tariff, when MDM is not even locally produced. No sense in increasing tariff on MDM. Local manufacturers will lose their competitiveness, which can only lead to higher prices,” he said.

Lopez further noted an increase in tariff is applicable only if there is a local industry that the government is protecting.

"MDM is not a natural product produced in the Philippines. I will be proposing for the continuation to maintain the five percent tariff on MDM," Lopez said.

"Our concern is the stability of prices and we would like to make the inputs cheaper. If we increase the tariff, the cost of inputs and the cost of products will rise."

Lopez said the cost of inputs or raw materials should be kept low, so that manufacturers of processed meat products will also keep the prices of their products affordable.

He said that despite the high inflation rate of 5.2 percent in June 2018, prices of processed meat products did not escalate. "The prices of processed meat did not move, despite the higher inflation," the trade chief said.