Agri Group Says That Reducing MDM Tariff Rate Will Have Little Effect on Retail Price

According to the Samahang Industriya ng Agrikultura (Sinag) states that consumers will not benefit from reduced tariffs on imported mechanically deboned meat (MDM) of chicken and other processed meat as the effects of this on the prices of canned goods will be minimal.

The group stated that “At [ the industry standard of a] 20-percent inclusion rate, a regular 100 milligram [can of] luncheon meat will only have an increase of 53 centavos from P1.57 to P2.10,”

Sinag mentions that the proposal to cut tariffs would affect government income as this would mean an estimated ₱6 billion in revenue losses annually.

Based on their approximations, if 236.7 million kilograms of imported MDM are taxed with a 40% tariff, then the government would be able to gain ₱7.1 billion in revenue. If this is lowered to a 5% tariff, the government would only be able to generate ₱887.6 million. This would mean a revenue loss of ₱6.214 billion.

With Executive Order No. 123, the validity of the reduced tariff rates on MDM imports was extended until December of this year and will go back to 40% beginning January 1, 2023.

Chicken and turkey MDM is being used as important ingredient in processed meat products.

Pampi had previously asked the Department of Trade and Industry (DTI) to approve a price hike of ₱1.50 to ₱2, amid the increasing costs of manufacturing processed meat products.

Jerome Ong, Pampi Vice President, has stated that the weakening peso and the Russia – Ukraine war have significantly increased input costs.

“All the raw materials and the production and input costs have increased significantly from fuel to electricity and labor cost,”  mentions Ong.

Source: Inquirer