April 28, 2021
 

Philippines' senators warn of pork 'cartel' profiting from government's move to cut import tariffs

 

 

Only a cartel of pork importers in the Philippines would profit by as much as ₱60 billion (US$1.2 billion) from the government's move to reduce pork prices by raising minimum access volume (MAV) and cutting tariffs on imports, senators and experts warned on April 27.

 

Under a government executive order, the tariff on pork imports under MAV quota is reduced to 5% for the first three months of the order's validity and to 10% for the fourth to twelfth month.

 

Opponents to the government's move said such actions would not necessarily reduce the prices of pork, but would instead lead to the collapse of the local hog industry.

 

The warning was raised at the resumption of the Senate committee of the inquiry into alleged corruption in the Philippines's pork imports, where Finance Secretary Carlos Dominguez III defended President Rodrigo Duterte's Executive Order 128 (EO 128) that lowered pork tariffs, saying it was a temporary measure to contain rising pork prices and involuntary hunger.

 

"It is not a question of smuggling or anything. It is because of shortage, and bringing in more supply would stabilise and bring down the price of pork and therefore, the inflation rate," Dominguez told the inquiry.

 

However, senator Cynthia Villar, who chairs the committee on agriculture and food, argued the possibility of "a cartel in the Philippine market place." Villar added: "Do not underestimate the cartel of importers. Even if the price is low – and they (cartel members) all know each other – they will control the price."

 

"They have long been importing and selling pork, why have they not reduced the price? It's not just about supply and demand," she told Dominguez.

 

Some senators and the local hog industry maintained they are not against raising pork imports but only to around 100,000 tonnes on top of the 54,000 tonnes allowed under the MAV, even as they strongly oppose any reduction in tariffs.

 

Senator Joel Villanueva presented data showing that previous increases in pork imports did not lead to corresponding reductions in prices.

 

Dominguez said that while EO 128 appears to be a painful solution as it would lead to a revenue loss of ₱13.68 billion (US$282.5 million) for the government, this would actually slash pork prices to a level estimated to save Filipino consumers ₱67.38 billion (US$1.4 billion).

- Philstar.com