USMEF Weekly Audio: Philippines Cuts Tariff Rates in Effort to Bolster Pork Supplies, Stabilize Prices
With pork production in the Philippines heavily impacted by African swine fever (ASF), President Rodrigo Duterte issued an executive order temporarily lowering tariff rates for imported pork muscle cuts. The Philippines’ standard tariff rates are among the highest in the world, with pork cuts imported within the country’s 54,210 metric ton quota typically subject to a 30% tariff, while imports beyond the quota are tariffed at 40%.
As U.S. Meat Export Federation (USMEF) Economist Erin Borror explains, Duterte’s order lowers the in-quota tariff rate to 5% for a period of three months, and to 10% for the nine months to follow. For out-of-quota imports, the order lowers the tariff rate to 15% for a period of three months, and to 20% for the next nine months. After 12 months, these rates will return to 30% and 40%, respectively, unless the lower rates are extended.
Borror notes that Duterte has also endorsed a significant increase in the quota threshold from 54,210 metric tons to 404,210 metric tons. The details are not yet final but if this recommendation is implemented, most pork cuts entering the Philippines in 2021 will qualify for in-quota tariff treatment.
The Philippines previously enacted retail price caps and other market interventions in an attempt to keep pork affordable, but these measures have been ineffective. Borror says the lower tariff rates will attract more pork cuts into the market – not only from the United States but also from Canada and European suppliers. While Germany, Poland and other countries where ASF is present are not eligible to export to the Philippines, European countries serving the market include Spain, Denmark, France and the Netherlands.
U.S. pork exports to the Philippines are off to a fast start in 2021. Through February, pork and pork variety meat exports totaled more than 11,500 metric tons, up 114% from a year ago, valued at $28.5 million (up 129%). This included 8,920 metric tons of pork muscle cuts, up 215% from a year ago, valued at $23.8 million (up 161%).
The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry. It is funded by USDA; the beef, pork, lamb, corn and soybean checkoff programs, as well as its members representing nine industry sectors: beef/veal producing & feeding, pork producing & feeding, lamb producing & feeding, packing & processing, purveying & trading, oilseeds producing, feedgrains producing, farm organizations and supply & service organizations. USMEF complies with all equal opportunity, non-discrimination and affirmative action measures applicable to it by contract, government rule or regulation or as otherwise provided by law. USMEF is an equal opportunity employer and provider.
Submitted to the BARN by:
Vice President, Communications
U.S. Meat Export Federation