The Philippine Tariff Commission is conducting a comprehensive review of its most favored nation tariff schedule. The U.S. Meat Export Federation filed comments in this proceeding, requesting that recent temporary reductions in the Philippines' MFN tariff rates for imported pork be adopted long-term.
Erin Borror, USMEF vice president of economic analysis, explains that temporary reductions (from 30% to 15% in quota and 40% to 25% out of quota) implemented in mid-2021 have smoothed supply constraints and mitigated the impact of African swine fever in the Philippines. Long-term adoption of these tariff reductions would bolster pork consumption by easing the impacts of inflation on Philippine consumers.
"The Philippines were kind of ahead of other countries that reduced pork tariffs or meat tariffs in general as part of an overall inflation battle," says Borror. "The Philippines had their tariff reductions starting in 2021 and this was largely due to their pork shortage due to African swine fever. It added 200,000 metric tons to the 54,000 roughly metric ton quota, which allowed for imports at a reduced tariff rate of 15%. So essentially cutting that rate in half and an out of quota rate of 40%, reduced down to 25. In 2022, they went ahead and extended the tariff reductions, however, that quota volume was not increased.
"What this means is essentially most pork entering the Philippines is levied a 25% tariff. Again, that's reduced from 40. But it's still at the highest of any of the major importing countries. African swine fever is also still spreading in the Philippines. So there should be clear incentive for the Philippine government to extend tariff reductions for a longer period of time."
USMEF emphasized that lower tariffs bolster pork demand, and that's good for both the domestic and global pork industries.
"In our comments we used the Korea example where pork consumption has grown through larger imports and larger domestic production helped by free trade agreements," Borror says. "Since implementation in 2012, Korea's tariffs on imported pork have been phased to zero. At the same time, Korea's pork production has grown by roughly 30% to a record level and consumption has grown by 35% to a record level. That has been a great example to use on the benefits of free trade to everyone - domestic producers, consumers and the exporters."