Facing a strong backlash from Congress against moves to import more pork at lower tariff rates, Finance Secretary Carlos Dominguez III urged lawmakers to support these measures as a temporary solution to address the scarcity and the resulting high prices for the commodity.
Dominguez said he and the economic development cluster in the Cabinet recommended the moves to the President after “extensive deliberations and consultations” with agencies and the public.
At the same time, Dominguez said the government, through the state-run Land Bank of the Philippines, will double its support for domestic hog raisers who have been hit hard by the African Swine Fever (ASF) and feed millers by providing them loans for repopulating their stock and for feed milling.
In a letter addressed to Senate President Vicente Sotto III, Dominguez said that as chairman of the Cabinet’s economic development cluster, he was taking full responsibility for supporting and recommending that the President sign Executive Order (EO) No. 128, which temporarily lowered the rates of the import duties on fresh, chilled and frozen meat of swine and increased the Minimum Access Volume (MAV) on such imports.
Dominguez said the period of the tariff adjustment under the EO emphasized that “this is a short-term effort that does not aim to harm the domestic industry” and complemented the programs of the Department of Agriculture to help the domestic hog industry recover.
“I would like to take this opportunity to urge the Senate to support this measure so that some 100 million Filipinos who eat pork, especially the poor, will not be penalized by high food prices. If left unresolved, poverty and malnutrition will increase,” Dominguez said in his letter.
“Elevated pork prices will add another problem to households whose incomes have already been heavily strained by the COVID-19 pandemic.
With African Swine Fever (ASF) raging through farms for almost two years, data show that domestic supply will remain inadequate for the needs of consumers,” he said.
Pork prices in the National Capital Region have already reached as high as P327 per kilo in March 2021, which is 59 percent higher compared to last year.
In March 2021, meat inflation increased to 20.9 percent and was the top contributor to overall inflation of 1.4 percentage points, even higher than the 1 percent contribution to inflation of rice at the height of the 2018 rice crisis.
Dominguez said that to resolve the ASF crisis gripping the domestic hog industry, the DA has put in place several programs, among them, repopulating the swine population, compensating producers for losses in culled hogs, and investing in long-term solutions to the problems of the swine industry.
He pointed out though, that these are medium-term and long-term solutions that will not immediately address the current price pressures affecting pork consumers.
Contrary to misperceptions, the DA does not intend to rely on importation alone to solve supply issues in the long haul, Dominguez said.
“Even with increased imports, a large part of domestic demand is expected to be covered by domestic production, which the DA will aggressively support with improved implementation of its hog production assistance and repopulation program,” he said.
Dominguez said the proposed pork import program will only cover 22.8 percent of total domestic consumption.
“The EDC fully understands that its ongoing efforts to support the domestic industry in overcoming ASF and other issues are critical,” he said.
Other members of the President’s economic team also supported the EO.
“The DTI supported this proposal as an immediate and temporary measure to address the inflationary effect, mainly of the pork meat shortage,” said Department of Trade and Industry Secretary Ramon Lopez.
The DTI shared a similar position with the Department of Agriculture (DA) and the National Economic and Development Authority (NEDA) “that the real solution to the current problem on increased prices of pork in the local market is to increase the supply.”
NEDA acting secretary Karl Kendrick Chua said pork importation at reduced tariff will keep inflation at bay at an estimated 3.8 percent, which is at the higher end of the target inflation rate of 2 to 4 percent in 2021.
He noted that in 2020, the country’s inflation rate was 2.7 percent and in the months of February and March 2021, inflation rate doubled
to 6 percent, basically driven by the lofty price of only one commodity– pork.
“What we want is to bring down the cost of pork from more than P300 per kilo to P215 to P222 per kilo, because this is what the normal price of pork,” Chua said.
NEDA also noted that currently meat inflation is at 20 percent but the inflation rate for pork is at 60 percent.
Meanwhile, Senate Minority Leader Franklin Drilon said the DA cannot raise the MAV on pork imports just yet as Congress needs to act on the proposal when it resumes session next month.
“To implement it without waiting for Congress to resume session and deliberate on the proposal is illegal, not to mention it is a total disrespect to a co-equal branch,” Drilon said.
Drilon explained that since the letter of the President recommending the increase was received by Congress when it was already on a break, it is only when Congress resumes session on May 17 that it can proceed to deliberate on the proposal.
“We provided a procedural framework, through Agricultural Tariffication Act, under which the fixing of MAV can be exercised by the President. The executive must follow such procedures faithfully,” he said.
Senator Joel Villanueva said cutting tariffs and increasing the volume of imported pork would lead to a flooded meat market, which would undermine efforts to get the country’s pig farmers back on their feet.
“Give our people imported pork, and we feed them for a day or even a month. But if we help our pig farmers back on their feet, they can feed us for a lifetime,” said Villanueva, chairman of the Senate labor.
“No senator is against pork imports, per se. But all of us are against excessive pork imports,” he added.
He said the President’s EO could lead to an “open season” for pork importation that would inundate a market that is having difficulties in remaining competitive.
He said that during the Senate hearings last week, senators were looking at a carefully calibrated importation of pork, and not a seemingly unrestrained entry of foreign meat.
The DA on Tuesday said lowering the tariffs and increasing imports could reduce pork prices to less than P300 per kilo.
Agriculture Secretary William Dar said Executive Order 128 is necessary to address the low supply of pork due to African swine fever and the increase in the prices of pork meat.
