MANILA, Philippines — Government economic managers have agreed to retain the tariff rate on imported mechanically deboned meat (MDM) at five percent to keep prices of canned meat products from rising at a time when the country has yet to recover from the pandemic.
An industry source privy to the matter said a new executive order is ready to be endorsed to President Duterte that would retain the most favored nation (MFN) tariff rates on MDM or separated meat of chicken and meat and edible offal of turkeys, both at five percent.
“Economic managers agreed on the five percent tariff retention. We just don’t know when the President will sign the EO,” the source told The STAR.
“Agriculture Secretary William Dar also agreed,” the source said.
Dar, on the other hand, said there has been no official communication yet as to the tariff rates.
Starting January 1, the tariff rates reverted back to a high of 40 percent as Executive Order 82 lapsed on December 31,2020.
The Philippine Association of Meat Processors Inc. (PAMPI) has long been petitioning to retain the five percent tariff from 2021 until 2025. PAMPI, however, declined to comment on the lapse of the EO.
MDM, a vital raw material used in processing, is a paste-like meat product produced by forcing pureed or ground beef, pork, turkey or chicken, under high pressure through a sieve or similar device to separate the bone from the edible meat tissue.
It was June 2019 when the five percent rate was extended to mitigate the impacts of high prices of goods.
“At that time, it took about three months before the EO was signed,” the source said.
“We don’t know how the Customs will interpret the scenario because I think they would need a policy order,” the source said.
While processors can actually replace MDM with local poultry, PAMPI earlier said it would contribute to a huge spike in the cost of products as MDMs remain to be much cheaper than the local poultry products.
Due to lack of local facilities in separating the meat from the bone, added costs will likely reach 40 percent and this can translate to higher price of finished products.
It was in 2012 when the 40 percent tariff on MDM was reduced to five percent as a concession to the quantitative restriction on rice imports.
Under Executive Order 23 issued in 2017, the tariff rates on agricultural products, including chicken MDM, must be brought back to their previous levels once the QR is removed.