MANILA (UPDATE) - Allowing the importation of pork at lower tariffs in the short term is an immediate and "practicable" solution to avoid further price spikes, Finance Secretary Carlos Dominguez III said Tuesday.
The measure will protect Filipinos from raising prices of food due to a shortage in supply that could further push inflation up, Dominguez said during a Senate Committee hearing on the food crisis brought by the African swine fever outbreak.
Inflation settled at 4.5 percent in March from 4.7 percent in February, hovering above the government's 2 to 4 percent target range as prices of pork and other meats remained elevated.
President Rodrigo Duterte earlier approved EO 128 or the proposal to cut pork tariffs to boost supplies of the commodity.
EO 128 reduces the tariff on imported pork covered by the import quota or minimum access volume, to 5 percent from 30 percent. Pork imports outside the quota meanwhile will be charged a 15 percent tax, instead of the current 40 percent.
Malacañang has also backed proposals to increase the minimum access volume to 400,000 metric tons from 54,000 MT today.
Dominguez said although the measure appears to be a painful solution resulting to a revenue loss of P13.68 billion for the government, it would slash pork prices to help Filipinos save P67.38 billion.
“The worse we could do in a situation like the one we are facing today is to let supply issues force food prices up even more. If food prices rise, the inflation rate also increases. If the inflation rate rises, interest rate increases will follow. This unhealthy chain of events will make economic recovery even more difficult for all,” Dominguez told senators.
Rising pork prices "exacerbate" the problems of unemployment, hunger and reduced incomes for many who are now relying on community pantries for aid, the Finance chief said.
“The short-term and only practicable strategy for the current problem is contained in Executive Order 128,” Dominguez said, adding that the government is "not giving up" on the pork industry.
The pork supply shortage caused by the ASF outbreak pushed prices of pork up to P327 per kilo, prompting authorities to set price caps.
The government is targeting to bring down pork prices to between P215 to P225 per kilo, Dominguez said.
Socioeconomic Planning Secretary Karl Chua also said that higher imports were necessary as hog production in the first quarter of 2021 has gone down by 26 percent.
However, critics pointed out that the measure would hurt local hog raisers.
Dominguez meanwhile said state lender Land Bank of the Philippines will double its support to domestic hog raisers to P30 billion from P15 billion, Dominguez said.
The Agriculture Department is also investing in long-term solutions to improve domestic hog production, he added.
Agriculture Secretary William Dar earlier said ASF cases in the country have been going down.
At least 1.6 million hog deaths were recorded in 2020, data from the Philippine Statistics Authority showed.
The DA earlier said the country's swine industry is valued at P260 billion.