May 26, 2004

Philippines Allows 5 Million Kg Of Chicken Imports At Lower Duty

The Philippine Department of Agriculture said Tuesday it will allow the import of 5 million kilograms of chicken at a preferential tariff rate, and added that this volume will also be exempted from a special safeguard duty.

In a statement, Agriculture Secretary Luis Lorenzo said the move is intended to deter further increases in local prices due to an upsurge in demand.

"We are taking this measure to address a temporary constriction of supply and we hope it will contribute to bringing stability in the chicken market," Lorenzo said.

The imports will be allowed to enter the country under the minimum access volume, or MAV, mechanism, which means they will carry a tariff rate of 40%. The MAV is the minimum amount of agricultural imports that the country must bring in at preferential tariff rates.

Also, any imports that come in below 94 pesos ($1=PHP55.97) a kilogram will be exempted from a special safeguard duty that is normally applied. Imports that come in below this price level usually carry a special safeguard duty - equivalent to the difference between the trigger price of PHP94/kg and the actual impost cost - but in this case any imports that come in below PHP94/kg will be made exempt.

Lorenzo said importers may bring in the 5 million kg during the June- August period, adding that this volume represents only about 3% of metropolitan Manila's annual chicken demand.

To help ensure there is enough supply to meet demand, traders and importers who do not have MAV licenses will also be able to import chicken.

Local prices of chicken have risen to PHP120/kg from a price range of PHP90 to PHP95/kg a month ago due to tightness in supply.

The tight supply has been caused by a shift in consumer demand as pork prices have remained high due to increased demand for pigmeat following a bird flu scare early this year.