By Genalyn Kabiling and Madelaine Miraflor
In a bid to cushion the impact of high prices of goods, President Duterte has decided to retain the 5 percent import tariff on mechanically deboned meat (MDM) of poultry until 2020.
The President has issued Executive Order No. 82 maintaining the reduced import duty on certain agricultural products upon the recommendation of the National Economic and Development Authority (NEDA).
“The present economic condition warrants the continued application of the reduced rate of duties on certain agricultural products to mitigate the impact of high prices of goods,” the order read.
Under EO 82, the rate of import duty on mechanically deboned meat of chicken and turkey and turkey meat and offals will stay at 5 percent for 2019 and 2020. MDM is a raw material used to manufacture chicken hotdogs, chicken nuggets and other processed meat products.
“The NEDA Board recommends the maintenance of the tariff rates under EO No. 23 for mechanically deboned meat of chicken and turkey, and turkey meat and its offals,” the order read.
In 2017, the President reduced the tariff of chicken MDM to 5 percent as a concession to trade partners for letting the country extend the quota on rice imports to protect local farmers.
The reduced rates, contained in EO 23, are supposed to lapse on June 30, 2020 or until such time the rice trade liberalization takes effect, whichever comes first. Republic Act No. 11203 lifting rice import quotas and imposing tariffs was signed by the President last February.
Meat processors cheered the President’s move. They earlier appealed to the government to retain the lower tariff rate on MDM to keep prices of canned goods and processed meat products affordable.
Local poultry growers, on the other hand, have reportedly asked the government to revert the tariffs on MDM imports to its 2012 level of 40 percent tariff as a protection to the industry.
“[This decision] reflects the government’s determined efforts to spur the growth of the local manufacturing industry,” Philippine Association of Meat Processors Inc. (PAMPI) said in a statement.
“The President’s action sends a strong signal to local and foreign investors that the investment climate in the Philippines is fair, attractive and competitive,” PAMPI further said.
PAMPI earlier argued that raising tariffs on imported raw materials for meat industry will result in increase in the price of meat products such as luncheon meat and sausages.
It was in 2012 when the government slashed the tariff on MDM to 5 percent as a concession to the country’s trade partners for allowing Manila to extend its special treatment for rice.
The tariff rate would eventually revert back to 40 percent as stipulated in World Trade Organization (WTO) rules, but that wouldn’t happen till January 1, 2021.