May 31, 2010

Philippines to resume duties on wheat

Philippines may not extend the duty-free entry of wheat imports in the country because the tariff cuts did not translate to price reductions in the local market.

Trade Undersecretary Zenaida Maglaya said that the Department of Trade and Industry would be submitting recommendations to the Tariff and Related Matters (TRM) Committee to review whether the zero tariffs on wheat and cement should be continued. Maglaya said there have been no significant reductions in the prices of bread and cement despite the tariff reductions.

In February this year, the government issued executive orders that removed the tariffs on wheat and cement for six months. Duty-free importation of wheat and cement were allowed since November 2008 by virtue of earlier executive orders.

Maglaya said that the government may have to look for other ways to bring down prices other than through tariff reduction.

Flour millers would have until this week to submit to the Trade department their computations in order to justify prevailing flour prices in the local market.

Last week, the agency asked millers to bring down their prices to 2007 levels. The department said global wheat prices and other cost factors such as freight and the foreign exchange rate were almost unchanged from three years ago but current flour prices are still higher by PHP200 (US$4.33).