Philippine President Ferdinand Marcos Jr. recently issued an executive order extending reduced tariff rates on a range of imported products, including pork cuts, through 2028.

The in-quota rate for pork cuts imported under the Philippines’ Minimum Access Volume quota will remain at 15% (down from the usual 30%) through the end of 2028. The out-of-quota rate will remain at 25% – down from the usual 40%. Most U.S. pork enters the Philippines out of quota, and thus at 25% duty. The lower rates have been in place since mid-2021, when the Philippines reduced import duty rates in an effort to bolster pork supplies and stabilize prices as its domestic industry dealt with the impact of African swine fever. Since 2021, the rate reductions have been extended at the end of each calendar year, but this is the first multi-year extension.

“The four-year extension is definitely a step in the right direction, as it adds a level of certainty for both importers and foreign suppliers, and eases the burden on consumers,” said Erin Borror, U.S. Meat Export Federation vice president for economic analysis. “But while U.S. exporters are pleased with the executive order, 25% is still a formidable duty in this price-sensitive and highly competitive market.”

The decision to reduce tariff rates came despite considerable pushback from domestic pork producers who view imports as a threat to their industry. But as USMEF pointed out in comments submitted last year to the Philippine Tariff Commission, countries such as South Korea have seen domestic production thrive amid rising imports as imported pork helps stabilize prices and makes pork more readily and consistently available, leading to sharp increases in consumption.

Without access to imported pork, the Philippines would clearly be facing a significant pork deficit. Domestic production remains well below pre-ASF levels, with 2024 production estimated to be about 32% below 2019. While imports now account for an estimated 45% of consumption, up from 22% in 2019, pork is still at risk of losing ground to other proteins. Estimated per capita pork consumption* is 12.2 kilograms this year, which is the most since 2019 but still well below the 2018 peak of 14.5 kilograms. Pork was the most consumed meat in the Philippines in 2018, but it was surpassed by poultry beginning in 2019. The impact of ASF was more significant than that of highly pathogenic avian influenza, and poultry also benefits from its relative affordability.

For many years, the Philippines primarily imported pork from the European Union, Canada and the United States. As imports from the EU were pressured by lower European production and lack of access for ASF-affected EU member states, Brazil emerged as the Philippines’ largest pork supplier. Through May of this year, total pork imports entering the Philippines were estimated at 165,000 metric tons, up 23% from last year’s pace. This growth was led by Brazil, whose presence in the market has been bolstered by a significant increase in the number of approved plants and competitive prices, assisted in part by a weak currency. January-May exports from Brazil topped 57,000 mt, up more than 80% from the same period last year. Exports also rebounded from the EU (50,000 mt, up 10%) and Canada (44,000 mt, up 5%).

Total shipments from the United States were up 8% through May, to about 24,000 mt, but this was driven by a sharp increase in variety meat exports (15,300 mt, up 33%, including a record 4,483 mt in May). U.S. muscle cut exports to the Philippines trended lower, falling nearly 20% from a year ago to 8,500 mt.

Although not affected by the recent executive order, pork variety meat items enter the Philippines at lower rates than muscle cuts. Most variety meats are tariffed at 10%, with lower rates for chilled pork offal (7%) and frozen pork livers (5%). Total variety meat exports to the Philippines were up by an estimated 15% through May, reaching about 101,000 mt. In addition to the robust increase from the U.S., variety meat exports also trended higher from the EU (63,600 mt, up 10%), the United Kingdom (7,000 mt, up 40%), Canada (6,300 mt, up 14%) and Brazil (5,700 mt, up 12%).

The Philippines does not currently have a free trade agreement with any major pork supplier, so nearly all of its pork imports are subject to the same tariff rates. But this could change in the near future, as both Canada and the EU are looking to revive FTA negotiations with the Philippines. The EU appears to have the inside track, with President Marcos recently stating that he hopes to finalize an FTA with the EU by 2027.

“If the EU or another major pork exporter reaches an FTA with the Philippines that eliminates, or substantially reduces, duty rates on imported pork cuts, the competitive landscape changes drastically,” Borror explained.

The Philippines is a participant in the U.S.-driven Indo-Pacific Economic Framework negotiations, but reducing tariff rates is not a component of the IPEF. The Philippines has expressed interest in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, but has not formally applied to join the pact. CPTPP membership would likely lead to improved access for Canadian, Mexican and British** pork.  

Corky Villalobos, USMEF’s representative in the Philippines, acknowledged the intensely competitive nature of the country’s pork market but emphasized there are growth opportunities for U.S. pork.

“USMEF is focused on differentiating the quality and consistency of U.S. pork, as well as the U.S. industry’s ability to serve as a reliable supplier,” she said. “We have expanded promotions and product demonstrations in wet markets, supermarkets and other retail venues and the consumer response to U.S. pork has been very positive. Opportunities also continue to emerge in the foodservice sector, as we work with restaurant managers and other decision-makers on menu concepts utilizing U.S. pork.”

*Includes domestic and imported pork cuts, variety meat and fat, in product weight.

**The United Kingdom’s accession to CPTPP was ratified earlier this year but will not enter into force until the UK and other CPTPP members complete their legislative processes.