NEDA sees hog industry surviving import competition

Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua

THE PROPOSED increase in pork imports is not expected to “kill” the hog industry, the National Economic and Development Authority (NEDA) said.

Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said at a hearing of the Senate Committee of the Whole Thursday that the recommendation to increase the minimum access volume (MAV) quota to 404,000 metric tons (MT) will ultimately be tempered by the lack of cold storage.

“The temporary increase in pork (imports) will not kill the hog industry as imports would potentially account for up to 22.8% of total consumption. Also, some experts mentioned that imports will not flood our market since African Swine Fever (ASF) has affected production in many countries,” Mr. Chua said.

“In addition, the limited cold chain facility in the country serves as a physical barrier to huge importation since the total capacity is estimated at 268,000 MT allocated for pork products, given the requirements for other commodities,” he added.

According to Mr. Chua, the pork meat (in carcass form) deficit for 2021 is estimated at 476,540 MT. This total was arrived at from the difference in projected carcass production of 1.2 million MT and demand of 1.67 million MT.

He said the deficit can be traced to the sharp decline in the swine population, which as of Feb. 8 was down 24.1% year on year or 3.08 million animals, according to the Philippine Statistics Authority.

“This huge drop is primarily due to the impact of ASF that has spread to almost all regions of the country,” Mr. Chua said.

Mr. Chua added that the entry of additional pork imports will help bring inflation down.

“If we augment our hog supply with imports, we could see a decline in full-year inflation by around 0.4 percentage points, from 4.2% down to 3.8%, which will fall within the central bank’s target of 2-4%,” Mr. Chua said.

The Senate Committee of the Whole adopted a resolution Thursday urging President Rodrigo R. Duterte to withdraw Executive Order (EO) No. 128, which lowered the tariff rates for imported pork.

The resolution also calls on the Senate, if necessary, to approve in the plenary session a resolution that will set the appropriate tariff rates and MAV quota.

“The Department of Agriculture (DA) failed to satisfactorily establish through accurate and reliable data that the country will have a 388,790 MT deficit in pork for the year which necessitates the increase in MAV,” according to the resolution.

“Industry members and experts believe that the reduction of import duty and the increase in MAV will not necessarily translate to lower pork prices and that such policies will only result in loss of billions of government revenue and the flooding of the market with imported pork,” it added.

On April 7, Mr. Duterte signed EO 128, which lowered the tariff rates on pork imported within the MAV quota to 5% in the first three months, increasing to 10% in the following nine months.

The order also lowered the tariff rates on out-of-quota pork imports to 15% in the first three months, rising to 20% in the succeeding nine months.

Before the issuance of the EO, in-quota pork imports paid 30%, while out-of-quota pork imports were charged 40%.

Mr. Duterte also recommended that Congress increase the pork MAV quota by 350,000 MT, on top of the current 54,210 MT. — Revin Mikhael D. Ochave