The Federation of Economic Freedom said Friday that extending the lower pork tariffs until December
2023 would result in consumer savings or benefits amounting to P156 billion.
“Extending EO [Executive Order] 171 until the end of 2023, particularly lower pork tariffs, is imperative if the government wants to slow down the rate of increase in meat prices. It is estimated that continuing the lower pork tariff rates until December 2023 would result in P 156 billion total consumer savings or benefits in 2023,” the FEF said in a statement.
It said the estimated net benefit of lower pork tariff rates would be about P113 billion from April to December 2022.
The group said government tariff revenues due to EO 171 were projected to increase by around P4.9 billion.
“Given the continuing conflict between Russia and Ukraine that has pushed prices of key agricultural commodities to multi-year highs, the rising headline inflation [at 7.7 percent as of October] where the food commodity group already contributes 45 percent of headline inflation as of October and the projected substantial local supply deficit of pork in 2023, there is a need to extend EO 171 until December 2023,” the FEF said.
It said the high headline inflation, particularly food inflation, resulted in greater food poverty among Filipinos at 34 percent as of October, higher than the average of 21 percent in 2021, citing the recent SWS survey results.
It said meat remained a significant contributor to food inflation, with a share of 24 percent in food inflation from January to October.
The group said the local supply of pork significantly declined due to the African Swine Fever, while local pork production also dropped to 1.2 million metric tons in 2021 from 1.6 million MT in 2019.
It said there was an annual supply deficit of 203,000 metric tons of pork from 2019 to 2021.
Local hog production averaged 1.4 million MT, compared to demand of 1.6 million MT.
“The supply deficit of pork is projected to significantly increase to approximately 489,000 MT in 2022. This is due to the substantially higher demand given the continued easing of health protocols and the projected recovery of the Philippine economy from the negative impacts of the COVID -19 pandemic,” the group said.
It said demand for pork would reach 1.7 million MT in 2022, while the local supply of pork was projected to rise slightly to 1.25 MT.
The FEF is a public advocacy organization dedicated to advancing the cause of economic and political liberty, good governance, secure and well-defined property rights, market-oriented reforms and consumer welfare.