Local producers urge TC to no longer extend MFN tariff cuts beyond 2023. MFNs are essentially pledges to extend preferential tax and duty treatment on services or goods exports of partner countries.
The country’s farmers on Tuesday urged the Tariff Commission (TC) to refrain from extending the most favored nation (MFN) tariff cuts on rice, corn and pork products beyond 2023, saying the mechanism has proven ineffective against price surges at the retail level.
“Our experience with tariff reduction is crystal clear; it has not benefitted the farmers, it has not favored the consumers and resulted in revenue losses to the government. Only a few privileged importers and favored traders are the true beneficiaries of tariff reduction,” SINAG, or the Samahang Industriya ng Agrikultura, said Tuesday at the hearing hosted by the Tariff Commission.
According to SINAG, the new proposal to cut the tariff on rice, pork and corn should be rejected outright on grounds of adequate supply of the commodities and that such cuts have never resulted in any significant decrease in retail prices.
The Federation of Free Farmers (FFF) said the tariff cuts have not been effective for rice since traders have not diversified their import sources and rely mostly on suppliers around the region.
“Imports from non-Asean sources have only marginal, if any, benefit to poor consumers. Only 32 percent of imports from Pakistan, the largest non-Asean supplier was for rice, with 25 percent brokens and more than half was for premium grade, with 5 percent brokens, or even less,” FFF said.
According to the group, the Philippines does not stand to gain material benefits from MFN mechanisms in exchange for foregone tariff revenue costing billions of pesos.
The Tariff Commission is expected to decide on the proposal in the months forward.President Marcos Jr. signed Executive Order 10 last year extending the reduced MFN tariff rates on pork, corn, rice and coal until 32 December this year.
The Department of Agriculture (DA) had said an extension is necessary as domestic goods production remains unreliable.
EO 10 duty on pork for in quota shipments stand at 15 percent and 25 percent for out quota shipments until the end of the year.
EO 10 has kept stable the in quota and out quota tariff on rice to 35 percent but placed corn tariff to 5 percent for in quota and to 15 percent for out quota until the end of 2023.
The policy also kept the zero tariff on coal beyond 2023 subject to a semestral review thereafter.
