Gov't to lift 3% tariff on wheat

MANILA, Philippines - The government is ready to lift the tariff on imported wheat to help local millers compete with imported flour, the Department of Trade and Industry (DTI) said yesterday.

The government imposes a three percent tariff on imported wheat. The zero tariff on wheat expired last year. Wheat is the major ingredient for flour.

In an interview with reporters, Trade and Industry Secretary Gregory L. Domingo said he met with millers who requested for the lifting of the tariff after imported Indonesian flour started coming in the market last year.

The Indonesian flour, which like locally milled flour also uses wheat from the United States, Canada and Australia, is cheaper than local flour. Indonesian flour cost only P840 per bag, while local flour is P900 to P950 per bag.

Domingo wants is to level the playing field because if other countries are not paying duty on imported wheat, then local millers should not pay either.

Indonesia reportedly has a five percent tariff on imported wheat, higher than the Philippine tariff of three percent.

According to Domingo, the tariff removal would correct the imbalance in the market. He said a zero tariff may lower flour prices but he cleared that it is not a guarantee that flour millers would decrease their price.

The DTI has been asking millers to decrease their price for months, but so far, Domingo said, they have not monitored any significant decreases. The DTI has asked millers to lower their price given that global wheat prices have been going down since July last year.

Flour millers have already said that they do not mind the three percent tariff. They said the cost of three percent tariff on wheat is only P20 per bag. Even with the tariff in place, millers have not increased their price.

For her part, Trade and Industry Undersecretary for Consumer Welfare Zenaida C. Maglaya said the government is ready to lift the three percent tariff on imported wheat. She said as far as she knows the Executive Order for duty free importation is ready. “It’s just a matter of publishing the EO.”

An EO must be published in a newspaper of national circulation before it can take effect. Maglaya explained that the removal of the import duty will level the playing field for local flour millers who use imported flour.