Tariff scarcity impact on inflation & # 39; insignificant & # 39; – CTRM report »Manila Bulletin Business


By Chino S. LeycO

The interinstitutional body charged with assessing the impact of the planned reduction in the rates of important raw materials has found that the proposal would not be significant in combating the sky-high consumer prices.

On the basis of a document from the joint meeting of the technical commission on tariffs and related matters (TCTRM) and the commission on tariffs and related matters (CTRM), the reduction of tariffs would probably lead to a fall in inflation by around 0.03 percent to 0.444 percent.

Earlier, the Duterte government considered removing tariffs for some agricultural products, such as maize, feed wheat, fish, vegetables and meat, in order to tackle inflation, which accelerated to 5.7 percent in July.

"NEDA [National Economic and Development Authority] it is estimated that the reduction of the tariff to zero of these products is likely to reduce inflation by 0.444 percent. BSP [Bangko Sentral ng Pilipinas] agreed with this assessment ", according to the document obtained by Manila Bulletin.

The Ministry of Finance (DOF), on the other hand, gave a much lower estimate of only 0.03 percent.

"Based on the findings of the tariff commission, the CTRM has established that most agricultural products are already imported from FTA [free trade agreement] partners and are therefore either zero-rated or preferential rates, "the report said.

For fish in particular, the TCTRM-CTRM noted that nearly 50% of imports, mainly from China, Vietnam and Japan, are already subject to zero duty while 45% of offal is "presumably" used for animal feed and raw fish. materials from food producers. The rates of slaughter waste vary from five to ten percent.

"Most of the country's fish requirements, particularly those commonly purchased by Filipino families, are sourced locally, such as tilapia, galunggung and milkfish, with 84.76 percent being produced locally for tuna, and the remainder is being imported," the report said.

For vegetables, the largest import of the country – garlic, onions and potatoes – has a uniform rate of 40 percent.

But agricultural secretary Emmanuel F. Piñol warned during the meeting that a further reduction of the traffic volume on these agricultural products could dampen their already lower sales prices on the local markets. The proposed reduction of the meat prices can meanwhile have no significant effect, because the price of local pork is stable, while for beef the costs can only decrease by P8, well below the current average market price of P280 to P320 per kilo.

Rather than reducing tariffs, the TCTRM-CTRM advised that "volume increase measures could help better mitigate temporary supply restrictions without unnecessarily harming farmers and local producers."

Apart from the increase in volume, the agricultural division has suggested that various administrative measures have to be taken to weaken inflation pressures, including the lifting of bans on imported galunggung.

Piñol also asked the Ministry of Finance and the customs office to temporarily suspend the special security check on poultry.

Previously Finance Minister Carlos G. Dominguez III said that, in spite of the potential loss of income, it should reduce the proposal to reduce tariffs for four agricultural products once the plan has been implemented. Dominguez, however, admitted that the proposal was unsure & # 39; used to be.

"That was a suggestion, we're studying it, but I'm a bit unsure now about what's really the conditions of some people in the house [of Representatives]. I'm not sure if I listened to an interview and said they will make a few changes, "said Dominguez.

Based on the DOF estimates, the proposed reduction of tariffs for chicken and fish alone would result in P2.8 billion of lost earnings.

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