Consumers won’t benefit from the proposal to keep the reduced tariffs on imported mechanically deboned meat (MDM) of chicken and other processed meat as the impact on retail prices of canned goods will be minimal, an agriculture group said.
The Samahang Industriya ng Agrikultura (Sinag) said slashing the tariff rate of MDM would create little impact on the retail price.
At [ the industry standard of a] 20-percent inclusion rate, a regular 100 milligram [can of] luncheon meat will only have an increase of 53 centavos from P1.57 to P2.10,” the group added.
Sinag also said the petition would hurt government coffers as the country would incur about P6 billion in foregone revenue yearly if the reduced tariffs were retained.
Based on their simulations, if 236.7 million kilograms of MDM imports (based on 2021 volume) are levied with a 40-percent tariff, the government would generate P7.1 billion in revenue. But if it is lowered to 5 percent, government earnings would only be P887.6 million.
This translates to lost revenue of P6.214 billion for the reference period, added Sinag.
Earlier, the Philippine Association of Meat Processors Inc. (Pampi) filed an appeal to maintain the 5-percent tariff rate on imported MDM.
By virtue of Executive Order No. 123, the validity of reduced tariff rates on MDM imports was extended until end-December and will revert to 40 percent starting Jan. 1, 2023.
Often used as a filing or extender, MDM of chicken and turkey is a key ingredient in processed meat products.
Hoping to get relief from the skyrocketing cost of manufacturing processed meat products, Pampi had sought the Department of Trade and Industry’s approval for a price hike of P1.50 to P2.
Pampi vice president Jerome Ong said the depreciation of the peso against the US dollar and Russia’s ongoing invasion of Ukraine have jacked up input costs.
Ong said the production cost alone has surged by 20 percent but did not provide comparative figures.
“All the raw materials and the production and input costs have increased significantly from fuel to electricity and labor cost,” said Ong in an interview with radio station dzBB.
He said the price increase should be P3 to P4 per can but the group was seeking a price adjustment of only P1.50 to P2 “as the consumers will suffer from higher prices of food products if everything will be passed on to them.”
Should the DTI approve their petition, the price hike will affect corned beef, luncheon meat, meat loaf, Vienna sausage and other canned goods, as well as hotdog, siomai, longanisa (Filipino sausage) and tocino.
The department last updated the suggested retail price of basic necessities and prime commodities on Aug. 12.
A 150-gram can of meat loaf is sold for P16.50 to P22.54 apiece while the 170-g variety is priced at P24.13.
Corned beef products weighing 150g retail from P20 to P34.75 each and the 175g ones range from P35.80 to P39.75.
Meanwhile, Ong said prices of ham would increase by only 3 to 5 percent due to low tariff duties imposed on pork imports