Sotto: Slashing of tariff on pork imports bad news to hog raisers

Senate President Vicente Sotto III on Thursday expressed alarm over the reduction of the tariff rates for imported pork meat to 5% to 20% from 30% to 40% for a year, which President Rodrigo Duterte allowed in a recent executive order (EO).

In a message, Sotto tells reporters that local hog raisers will be "utterly disappointed" with the President's decision, "not to mention the members of the Senate."

"That is bad news! The MAV (minimum access volume) could have been raised but not the lowering of tariff," he said.

Duterte issued EO 128 on Wednesday on the reduction of the tariff rates on pork imports.

Under EO 128, the tariff rate for  imported pork meat within quota or minimum access MAV—whether fresh, chilled or frozen—will be pegged at 5% for the first three months upon the EO’s effectivity and 10% for the fourth to 12 months.

The tariff rate for imported meat outside of the MAV, however, has been set to 15% for the first three months upon the EO’s effectivity and 20% for the fourth to the 12th months.

The existing 30% to 40% tariff rate for imported pork will be restored after the 12th-month period.

“There is an urgent need to temporarily reduce the most favored nation tariff rates on fresh, chilled or frozen meat of swine to address pork supply shortage, stabilize prices of pork meat and minimize inflation rates,” the EO read.

Earlier, the National Economic Development Authority recommended the lowered tariff rates. But NEDA's reasons to recommend tariff rate cut have failed to convince Sotto.

"The reason they are giving for the lowering of taxes is not acceptable. There must be something else," he said. "That’s what we want to find out on Monday."

The Senate Committee of the Whole is set to conduct its first hearing on Monday on the food security crisis and the alleged "tongpats" (padded costs) on pork products.

Senator Panfilo Lacson, who revealed the alleged "tongpats," said the Senate will "dig deeper" into the issue during their hearing next week.

"While we cannot question the President’s authority under the law to adjust the tariff rates while Congress is not in session, the Senate Committee of the Whole that is scheduled to conduct its first hearing on this issue on Monday intends to dig deeper into the circumstances that brought the hog and poultry industry to this  pathetic state," Lacson said in a text message shared with reporters.

He added that the Senate will also look into how the tariff reductions, both for in-quota and off-quota "will impact the country’s food security as well as the foreseen revenue losses and the unabated corruption and technical smuggling of agricultural products."

Senate's investigation into the food security crisis stemmed from the information received by Lacson from "high-placed" sources alleging that there is "tongpats" or padded costs of P5 to P7 per kilo of pork import in the current importation setup.

He said the padded costs may significantly increase if the tariffs on pork imports are reduced and the MAV allocation is increased.

Agriculture Secretary William Dar has already ordered an investigation into the allegations of Lacson on "tongpats." —LBG, GMA News