Duterte signs EO keeping deboned meat tariff at 5 percent
MANILA, Philippines—President Rodrigo Duterte ended a dispute between the country’s meat processors and importers on one side and local meat producers on the other after signing an order retaining a 5 percent tax on mechanically deboned meat (MDM), a key ingredient in processed meat products.
MDM, which is mostly imported, is often used to manufacture hotdogs, luncheon meat and canned meat products.
The tariff on MDM has long been a bone of contention among industry players with importers and processors insisting that the tax should stay at 5 percent and producers saying it should be 40 percent.
Duterte finally ended the debate by signing Executive Order No. 123 on Monday (Jan. 18) retaining MDM tariff at 5 percent.
The move was recommended by the National Economic and Development Authority (Neda) and Department of Agriculture and would be in effect until end of 2021.
“In view of the continuing crisis brought about by the COVID-19 pandemic, there is an urgent need to adopt measures aimed towards mitigating the adverse impact of the current situation on the lives and livelihoods of Filipinos,” the EO said.
“It is necessary for the government to provide an enabling environment that ensures the continued supply of essential food products at stable prices…” it added.
The Samahang Industriya ng Agrikultura (Sinag), composed of planters and raisers, had lobbied to revert MDM tariff to 40 percent, arguing that this would provide additional revenue of up to P5.48 billion against P685 million on 5 percent tariff.
However, the group also said that it would result in an increase in the prices of canned products by about 2 percent, which Agriculture Secretary William Dar does not want to happen.
The Philippine Association of Meat Processors Inc. (Pampi), one of the biggest meat processing groups in the country and the most vocal in its bid to keep the 5 percent tariff, said “the EO is consistent with the government’s well-defined policy to promote the domestic manufacturing sector, generate employment, protect consumers, and ensure economic growth.”
Felix Tiukinhoy Jr., Pampi president, said canned products using MDM are one of the staples in relief food packs distributed during national emergencies arising from natural calamities or disease outbreaks.
The 5-percent tariff slapped on MDM was used as a bargaining chip by the Philippines in the World Trade Organization to allow it to limit the entry of some agricultural imports in the country like rice.
Sinag said it believes that the enactment of the rice tariffication law, which removed volume restrictions on rice importation, was enough basis for MDM tariff to revert to 40 percent.
Duterte, in 2017, kept MDM tariff at 5 percent through EO No. 23. This was extended by EO No. 82.
Edited by TSB
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