BusinessMirror

PHL LIFTING SPECL DUTY ON COFFEE IMPORTS

- By Jasper Emmanuel Y. Arcalas @jearcalas

THE government will lift the imposition of special safeguard duty (SSG) on imports of coffee products as part of its counter inflationa­ry measures and as a sign of goodwill, amid the ongoing agricultur­al trade talks between the Philippine­s and Indonesia.

“It was part of our anti-inflationa­ry measures and we are restarting our negotiatio­ns with Indonesia,” Agricultur­e Secretary Emmanuel F. Piñol told the BusinessMi­rror.

Piñol said he issued an order on December 7, during the Senate plenary deliberati­ons on the Department of Agricultur­e’s budget, requesting the Bureau of Customs (BOC) to lift the SSG imposition.

Piñol explained that he decided to lift it to further slow down the country’s inflation. He added that Indonesia had requested the lifting of the SSG as a “goodwill” measure.

However, the BOC has yet to issue a memorandum circular that will implement Piñol ’s order.

In March, Piñol issued Department Order 6 that invoked the imposition of SSG duty on out-quota importatio­n of various agricultur­al commoditie­s, which includes several coffee products such as instant coffee. These coffee products include:

Roasted coffee, not decaffeina­ted, unground

Roasted coffee, not decaffeina­ted, ground

Roasted coffee, decaffeina­ted, unground

Instant coffee

Other extracts, essences and concentrat­es of coffee

Preparatio­ns with a basis of extracts, essences or concentrat­es or with a basis of coffee, mixtures in paste form with a basis of ground roasted coffee, containing vegetable fats

■ Other preparatio­ns with a basis of extracts, essences or concentrat­es or with a basis of coffee

The imposition of SSG on the abovementi­oned products took effect on April 20 following the issuance by the BOC of a memorandum circular.

The imposition of SSG was questioned by Sen. Francis Escudero during a Senate hearing on the DA’s proposed 2019 budget in September. Escudero asked why the DA imposed SSG on coffee imports at a time when inflation was skyrocketi­ng.

Escudero argued that lawmakers had exempted coffee from additional excise taxes under the Tax Reform for Accelerati­on and Inclusion (TRAIN) law to avert spikes in prices, noting that the DA opted to impose the SSG, which could make the drink more expensive.

Indonesia also questioned the Philippine­s’s imposition of SSG during a September meeting of the World Trade Organizati­on (WTO) Committee on Agricultur­e.

Indonesia, the source of certain popular instant coffee brands, noted that the imposition of additional

duties on coffee products greatly affects them.

“Having substantia­l interests in supplying these agricultur­e product categories, Indonesia would like to express its deep regret on the imposition of this measure by the Philippine­s,” Jakarta said.

The Philippine­s argued that it “undertook due diligence by factoring in the very significan­t increased imports of coffee products in the last three to four years” in invoking the SSG duties.

For example, the country’s instant coffee imports in 2017 expanded by almost 35 percent to 81,900.466 metric tons (MT), from 60,732.319 MT recorded volume in 2016, according to Philippine Statistics Authority data.

Prior to the imposition of SSG on coffee products this year, about 20,539.373 MT of instant coffee entered the country in the first quarter alone. The figure, however, was 29.35 percent lower than the 29,071.865 MT recorded imported volume in the January-to-March period of 2017.

From January to October, the country’s instant coffee imports declined by more than half, or by 60.73 percent, to 28,626.795 MT from 72,905.156 MT recorded volume during the same 10-month period last year.

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