Reduced tariff rates extension to better manage inflation, food security in 2024 – NEDA

The extension of the reduced Most Favored Nation (MFN) tariff rates for key agricultural commodities such as pork, corn, and rice is seen to ensure sufficient and affordable food supply for Filipinos in the coming year, according to the National Economic and Development Authority (NEDA).

Executive Order No. 501, issued by President Ferdinand R. Marcos, Jr. on December 22, 2023, extends the reduced MFN tariff rates on key agricultural goods until December 31, 2024.

Under this new EO, the tariff rates for pork will remain at 15 percent in-quota and 25 percent out-quota; while corn will be at five percent in-quota and 15 percent out-quota; and rice at 35 percent for both in-quota and out-quota for the extended period.

NEDA Secretary Arsenio M. Balisacan underscored the importance of keeping the reduced tariffs for basic commodities while world prices for these commodities remain elevated and local production falls short of demand at affordable prices, particularly among low-income households. According to the NEDA Secretary, this will help reduce the supply risks and alleviate the inflationary pressures caused by the onset of El Niño, the worsening effects of African Swine Fever (ASF), and external pressures such as geopolitical tensions and export bans imposed by some countries.

While the swine flu, production shortfall in corn, and estimated supply deficit in rice drove price increases in these commodities for this year, additional meat importation played a crucial role in reducing meat inflation to -1.2 percent in September 2023, down from 21 percent in 2021.

In addition, the reduction on tariff rates had pulled down corn inflation and broadened market sources for rice, mitigating the impact of elevated inflation in September of this year.

Balisacan also emphasized the importance of complementing this trade policy with crucial strategies and programs to enhance local food production and boost the productivity of farmers. These crucial strategies include sustained investments in irrigation, flood control, supply chain logistics, and climate change adaptation.

“Short-term and long-term interventions need to work together to protect the purchasing power of Filipino households and boost the productivity and income of local producers. Doing so will ensure equitable and sustainable development for the country,” stated the government’s chief economic planner.