Economists push for lower tariffs for out-quota corn imports to cushion price increases

MANILA, Philippines – A group of economic reform advocates formally filed a petition before the Tariff Commission to lower duties on out-quota corn imports from 15% to 5%.

The petitioner, Foundation for Economic Freedom (FEF), said this will cushion price increases and unify the tariff structure for both in-quota (5%) and out-quota (15%) corn imports to 5%. Out-quota imports are those that exceed the minimum access volume (MAV) that the government set. Higher tariffs are typically imposed on out-quota imports.

“Animal feed represents the single largest cost component in poultry and swine production, accounting for up to 70% of production costs. Consequently, corn is the major ingredient in animal feed, accounting for 50 to 65% of feed formulations. Hence, lowering the cost of corn will eventually result in lower pork and chicken prices,” the FEF said in a statement on Wednesday, April 22.

Lower prices of corn can thus help mitigate the impact of the oil crisis on food production. Inflation in the Philippines nearly doubled to 4.1% in March as the Middle East crisis caused a surge in fuel and transport costs.

Lowering tariff creates a multiplier effect, said the FEF, that will be felt across feed mill operators and poultry, livestock, and aquaculture producers. Filipino consumers may benefit too from affordable protein sources, especially as many children and adolescents suffer from malnutrition.

“A uniform and lower tariff on corn would therefore help improve access to affordable protein, support better nutrition outcomes, reduce child stunting, and strengthen the country’s human capital base,” the FEF said.

President Ferdinand Marcos Jr. had instructed the Department of Agriculture and the Tariff Commission to study tariff reduction of imported goods as the Middle East conflict threatens global food production and security.

The agriculture department is already considering an increase in corn and pork imports at lower duties through a mechanism called the MAV Plus.

The FEF warned, however, that this move may only foster favoritism for some importers to get bigger volume quota.

Created in 1996, the FEF advises the government on key policy issues and seeks public support for its advocacies on economic reforms. It is chaired by former finance secretary Roberto de Ocampo with political economist Calixto Chikiamco as president. – Rappler.com