MEAT processors said the retention of the 5% most-favored nation tariff on mechanically deboned meat (MDM), which it relies on as a key raw material, will help keep food inflation in check.
Jerome D. Ong, vice-president of the Philippine Association of Meat Processors, Inc. (PAMPI), said at a virtual hearing of the Tariff Commission (TC) that the group proposes to keep tariffs at 5% for chicken and turkey MDM between 2023 and 2025.
MDM is used to make hotdogs, dim sum products like siomai, and meat loaf.
“PAMPI’s petition is intended primarily to support the administration’s determined efforts to keep the national economy stable and help control inflation, especially food inflation. The stable economy ensures that processed meat manufacturers under PAMPI as well as those outside of PAMPI would be able to continue producing food for our people at affordable prices,” Mr. Ong said.
The 5% tariff rate currently enjoyed by chicken and turkey MDM imports is authorized by Executive Order No. 123 signed by former President Rodrigo R. Duterte in January 2021. It is set to expire by the end of the year.
If not extended, tariffs on chicken and turkey MDM will return to 40% by Jan. 1.
“The 5% tariff on MDM helps keep prices of processed meat products reasonable,” Mr. Ong said.
“If we make it three years, I hope domestic sources of MDM will become available by then and we will not have to depend on imported MDM. As much as possible, we would like to buy all of our materials locally and support domestic producers,” he added.
Meanwhile, Samahang Industriya ng Agrikultura Executive Director Jayson H. Cainglet said the government loses at least P6 billion in revenue each year with tariff rates at 5%.
“For MDM alone, we computed foregone government revenue of at least P6 billion annually. Because of the post-pandemic situation, the overarching economic blueprint of most governments is to raise government revenue to support economic recovery. Depriving the government of the much-needed revenue is self-serving,” Mr. Cainglet said.
“It is time to help the agriculture industry. It is clear in the marching orders of the new government (is to) support local production,” he added.
Mr. Cainglet said that the reduced tariff did not result in lower prices for canned and processed meat.
“The very basis of the proposal is to reduce the retail price. We looked at the data, the price never went down when the tariff was reduced,” Mr. Cainglet said.
The latest suggested retail price list of the Trade department issued on Aug. 12 indicates that the price of processed canned meat rose 6%.
According to TC data presented during the hearing, chicken MDM imports in the first half of 2022 increased 21% to 109,000 metric tons (MT), while turkey MDM imports fell 60% to 171 MT.
The TC also found that between 2019 and June 2022, the main source countries were Brazil with 34% of chicken MDM, the Netherlands 25%, Belgium 12%, the US 10%, and Canada 7%.
Some 97% of turkey MDM imports were from Canada. Brazil accounted for 2%, while the Netherlands and Turkey both supplied less than 1%. — Revin Mikhael D. Ochave