The Philippine Association of Feed Millers Inc., representing more than 30 feed millers, on Thursday asked the government to extend the reduced tariff regime on imported corn beyond 2022.
PAFMI said in a statement the continued volatility, uncertainty, complexity and ambiguity of the global food, feed and fuel supply chain had caused high inflation.
Executive Order 171, signed by former President Rodrigo Duterte in May, reduced the tariff rates on yellow corn, pork, rice and coal until the end of the year.
The EO aimed to mitigate the increasing inflation resulting from the Russian invasion of Ukraine in February and the disruption of global supply chains, particularly for oil, fertilizers and grains.
The group said imported yellow corn, which augments local production, is a vital ingredient in feeds for the livestock and poultry sectors, accounting for about 50 percent to 70 percent of the total cost of feeds.
“The lowering of tariff on imported corn this year provided a much-needed reprieve to counter rising pork prices after local production was severely affected by the spread of the African swine fever,” PAMFI said.
PAMFI said the successive interest rate hikes imposed by the US Federal Reserve this year had dampened the effectiveness of EO 171. The resulting strong US dollar weakened the Philippine peso, increasing the country’s cost of imports.
“The Philippine government continues to apply various measures to manage local inflation, and PAFMI believes that maintaining the lowered tariff on imported yellow corn for an extended period in 2023 would help keep pork and chicken prices at levels that would not exacerbate inflation further,” the group said.
PAFMI also asked the government to increase the allowed minimum access volumes for imported corn to expand the benefit that accrues from lower tariffs, especially with inflation expected to remain high well into the next year.
PAFMI said global demand for grains and oil seeds would remain in a high-price environment, and some countries were already importing grains for storage.
“With the region heavily dependent on imported grains, additional measures are needed to ensure that importation of wheat and corn for feed use is not exposed to further uncertainties,” PAMFI said.
It said that with EO 171, the country was able to import yellow corn at lower tariffs of 5 percent in quota and 15 percent for out of quota.