Consumers seen saving P61.5 billion from pork imports
MANILA, Philippines — Filipino consumers are expected to save some P61.5 billion if more pork imports at lower tariffs will be available.
The Foundation for Economic Freedom (FEF) said the loss in tariff revenues of P13.4 billion will be more than offset by the cost savings of over 95 million pork consumers amounting to P61.5 billion.
“This is if we assume a lower prevailing pork price, but prices are now hovering between P350 to P400 per kilogram and will break the P400 barrier if the status is maintained,” FEF said in a statement over the weekend.
Lawmakers are moving to revoke Executive Order 128 that temporarily slashes tariff rates for pork imports in the country in a bid to stabilize prices affected by dwindling supply amid the African swine fever (ASF).
Cutting the tariff rate and increasing the minimum access volume (MAV) for pork imports are among the short-term measures of the government to bring down prices.
FEF argued that consumers cannot afford to wait for medium to long-term interventions to repopulate hogs locally and eradicate ASF.
“Millions of consumers have very limited room to absorb major price increases in essential goods, as the COVID-19 pandemic has resulted in widespread loss of income and jobs,” FEF said.
“Refusing to take immediate short-term action will exacerbate the elevated hunger incidence in the country. The immediate task at hand is to give the people access to adequate and affordable food,” it said.
This year, the deficit in pork meat is estimated at 476,540 metric tons (MT) as the country’s swine inventory went down 24 percent due to ASF. The increase in MAV has been set from 54,210 MT to 404,210 MT.
FEF maintained that the large supply deficit led to a drastic increase in pork prices, a double whammy for consumers who are already reeling from income and job losses due to the pandemic.
“If pork prices are not brought under control, elevated prices will cascade down to other commodities, and will add pressure on the already shrinking incomes of Filipinos families,” it said.
Without facilitating an increase in imports, FEF said meat inflation would remain at highly abnormal levels.
Meat inflation surged to 20.9 percent in March, the top contributor to overall inflation for the month. It even exceeded the rice inflation during the height of the inflation spike in 2018.
The National Economic and Development Authority said augmenting current supply with imports would lead to a decline in full year inflation by around 0.4 percent points.
Inflation for 2021 will settle at 4.2 percent if no reform will be done. However, it is expected to be at 3.8 percent if additional importation will be pursued.
FEF noted that EO 128 is a temporary measure that provides immediate and short-term intervention to address the situation. Such an order is expected to be gradually phased out over the next 12 months.
“The recovery of the hog industry will take time. Upon the expiration of the tariff measure, we look forward to seeing the domestic hog industry back on its feet and ready to supply the needs of the country,” FEF said.
“But there is an urgent need today to address the rising hunger in the country,” it said.