USMEF economist comments on Philippine tariff rate cut

by | Apr 12, 2021 | 5 Ag Stories, News

The U.S. Meat Export Federation continues to review last week?s announcement from the Philippines that it will temporarily lower tariff rates for imported pork muscle cuts.

The Philippines’ standard tariff rates are among the highest in the world, with pork cuts imported within the country’s 54,210 metric ton quota typically subject to a 30% tariff, while imports beyond the quota are tariffed at 40%.

USMEF economist Erin Borror says the order lowers the in-quota tariff rate to 5% for a period of three months, and to 10% for the nine months to follow. For out-of-quota imports, the order lowers the tariff rate to 15% for a period of three months, and to 20% for the next nine months. After 12 months, these rates will return to 30% and 40%, respectively, unless the lower rates are extended.

“They are set to return to those higher rates by April of 2022 if there isn’t an extension,” Borror said. “The piece we’re still waiting on is another potential executive order to expand that quota from roughly 54,000 tons to 404,000 tons. The increase in the quota is another important piece of this that we’re not sure of yet. This really should benefit Philippine consumers. That’s why the President went ahead with the tariff reductions, realizing they need more affordable pork in the Philippines. You’re looking at pretty tight global supplies, so for the Philippines to be able to buy more, the 30% tariff was just not going to cut it.”

U.S. pork exports to the Philippines are off to a fast start in 2021. Through February, pork and pork variety meat exports totaled more than 11,500 metric tons, up 114% from a year ago, valued at $28.5 million (up 129%). This included 8,920 metric tons of pork muscle cuts, up 215% from a year ago, valued at $23.8 million (up 161%).