Tariff on imported deboned meat to maintain SRP of processed and canned meat products

President Rodrigo Roa Duterte issued EO 123 that retained the 5% tariff rate on imported mechanically deboned meat (MDM) instead of increasing it to 40%. The retention of 5% MDM tariff prevented any huge price increase in the processed and canned meat products.

Department of Trade and Industry (DTI) Secretary Ramon Lopez earlier reported that the Committee on Tariff and Related Matters, co-Chaired by DTI and the National Economic and Development Authority (NEDA) Secretary Karl Kendrick Chua, recommended to the President to keep the MDM tariff rates to 5% to avert any increase in production cost of mass-based canned and processed meat products.

This decision has been finalized with President Duterte’s signing of Executive Order (EO) No. 123, s. 2020 entitled, “Modifying the Rates of Import Duty on Certain Agricultural Products Under Section 1611 of the Republic Act (RA) No. 10863, otherwise known as the Customs Modernization and Tariff Act” on 15 January 2021.

The trade chief supported the issuance of the new order and said, “Keeping the tariff rates at 5% will keep the cost down for processed meat manufacturers and avert unwanted and untimely price increases in processed meat products.”

He explained, “There is no need to increase the tariff to 40% because there are no local producers to protect. Since MDM is a main cost component in low-priced canned and processed meat products, any tariff increase will only lead to the inflation of cost and prices of most canned meat products that are also part of basic goods in our SRP.”

The President issued EO 123 upon the recommendation of DTI and NEDA together with other agencies in the NEDA Board Committee on Trade and Related Matters. These include the Departments of Budget and Management (DBM), Finance (DOF), Agriculture (DA), Energy (DOE), Transportation (DOTR), Human Settlements and Urban Development (DHSUD), and the Bangko Sentral ng Pilipinas (BSP). Senator Christopher Lawrence “Bong” Go likewise supported the move to retain the tariff rate for MDM.

The new EO amends EO 82, signed by the President in June 2019, which prevents the tariff rate to reverting back to a high of 40% at the beginning of 2021 amid the lapse of the country’s Quantitative Restriction (QR) privileges and the eventual enactment of the Rice Tariffication Law (RA 11203) on 31 December 2020.

In support of the government’s efforts to promote economic growth while ensuring affordable food products to its people, Sec. Lopez reiterated, “Our priority has always been to protect the best interest of the consumers and promote their general welfare, especially at this time of the pandemic.”

“These products are what the majority of the Filipino consumers buy, and during these challenging times, we want to ensure that their access to these basic goods will not be affected by tariffs and price increases,” he added.

MDM, a vital raw material used in the processing of low-priced canned goods, is a meat product produced by forcing bones, with attached edible meat, under high pressure through a sieve or similar device to separate the bone from the edible meat tissue.