Tue, 18 May 2021

NEDA supports temporary increase in pork MAV, lower import tariffs

Philippine Information Agency
18 Apr 2021, 05:38 GMT+10

QUEZON CITY, Apr. 16 (PIA) - The National Economic and Development Authority (NEDA) supports the temporary increase of the minimum access volume (MAV) for pork coupled with lower tariffs to help fill the deficit, reduce food prices, and ensure our food supply is adequate and affordable, said Acting Socioeconomic Planning Secretary Karl Kendrick Chua recently during the Senate Committee of the Whole Hearing on Pork Importation on April 15.

"The country currently has a huge supply deficit in pork. The Philippine Statistics Authority (PSA) Swine Situation Report of February 8, 2021, shows that the country's swine inventory decreased by 3 million heads or 24 percent from 2020 to 2021. This significant drop caused by the African Swine Fever outbreak, affected almost all regions of the country," Chua said.

He explained that the large supply deficit has led to a rapid spike in pork's retail price. In March 2021, Philippine pork prices averaged 288 pesos per kilo and reached as high as 327 pesos per kilo in NCR, or 59 percent higher. Before the supply shock, pork prices were relatively stable at around 224 pesos per kilo.

"The proposal to increase the MAV for pork from 54,000 to around 404,000 metric tons by the Department of Agriculture is consistent with the supply deficit estimated by NEDA," said Chua.

He assured that the temporary increase in pork imports will not 'kill' the local hog industry, as imports would potentially account for up to 22.8 percent of total consumption.

He also noted that, as mentioned by some experts, imports will not flood our markets since ASF has also affected hog production in many countries.

"The limited cold chain facility in the country serves as a physical barrier to huge importation since the total capacity is only estimated at around 268,000 metric tons, allocated for pork, given the requirements of other commodities. Hence, we think the 404,000 plus metric tons proposed for importation will only gradually enter the country as needed, instead of being imported at the same time, contrary to industry concerns," he emphasized.

Furthermore, he said that the pork's tariff rate also needs to be low enough to reduce and stabilize retail prices.

"Before the spike in pork price, the normal price of lean pork was around 224 pesos per kilo. If we want retail prices to revert to this level, we also need to lower the tariff rate to complement the increase in the MAV, for a temporary period," he said.

He emphasized that lowering the tariff rate temporarily to 5 to 10 percent, would lead to lower landed cost of around 215 to 222 pesos per kilo, closer to the pork retail price. Compared to the high end of the pork price ceiling of 350 pesos per kilo in March and April 2021, the lower tariff rates of 5 to 10 percent can translate to lower retail prices by 128 to 135 pesos per kilo. (MCG/PIA-IDPD/NEDA)

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