Higher tariff on processed meat will yield P5.3B in additional revenues – Sinag
The government will gain P5.3 billion in revenues if it will increase the tariff on mechanically deboned meat (MDM), or the raw materials used for processed meat products, to 40 percent from the current 5-percent rate.
During the public hearing in the Tariff Commission Wednesday, Samahan ng Industriya at Agrikultura (SINAG) Chairperson Rosendo So expressed his support to bring back the MDM tariff rate to its old level, contrary to the petition of the Philippine Association of Meat Processors, Inc. (PAMPI) to keep the rates at the current level.
So explained that even while the country imported around 258 million kilograms of MDM in 2017, the government only collected around P663 million at 5-percent tariff. He added that if the tariff would be reverted to 40 percent, the government would be gaining P5.3 billion from MDM imports, or an additional P4.6 billion in annual revenues.
The lowering of tariff on certain agricultural products including MDM was the country’s compensation for the extension of quantitative restriction (QR) on rice it requested to the World Trade Organization (WTO). The first round of QR on rice expired in 2005. The country requested for a seven-year extension through a waiver, maintaining the QR until 2012.
However, the Philippines was asked then to reduce most-favoured-nation (MFN) rates on certain agricultural products including MDM to compensate the QR extension. The lowering of tariff for certain agricultural products was also implemented through Executive Order (EO) No. 627 issued on June 15, 2007.
With further request for extension, the country was able to retain the waiver until June 2017. According to the WTO, the waiver shall cease to exist upon the termination or expiration of the waiver.
While the WTO concession expired in 2017, President Rodrigo Duterte issued the EO No. 23, which retains the lowered duty of certain agricultural products until June 30, 2020.
However, as the administration is pushing for the rice tariffication bill in Congress, the days for lower tariff on MDM being enjoyed by processed meat manufacturers could be numbered.
This prompted PAMPI to ask the government to retain the current 5-percent tariff on MDM of chicken and turkey meat and offals. “We had petition at this time that this is what’s helping us keep prices lowered or staying at the same levels,” PAMPI Executive Director Francisco Buencamino said.
Hotdog, luncheon meat, longganisa, siomai, among other processed meat used MDM.
According to PAMPI Vice President Jerome Ong, the affordable processed meat products were using more MDM while premium processed meat products have little MDM.
PAMPI earlier said prices of hotdog and canned meat products containing MDM are expected to increase by 12 to 17 percent if the tariff of MDM would be reverted to 40 percent. (PNA)