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Cabinet unanimously rejects zero tariff plan
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Cabinet unanimously rejects zero tariff plan

MANILA, Philippines, August 10 ------ Cabinet officials are unanimously against the proposal to reduce to zero the tariff on some agriculture products as part of measures to control inflation, citing the scheme’s adverse effect on local producers, Malacañang said yesterday. Presidential spokesman Harry Roque told reporters that no Cabinet member had voiced support for the zero tariff proposal which, if implemented, would likely flood the market with imported goods.

Albay Rep. Joey Salceda on Wednesday announced that President Duterte would issue an executive order imposing zero tariff on imported fish, corn and vegetables and feed wheat to rein in inflation. Salceda said the EO would be released at the end of Congress’ 11-day break beginning next weekend.

The zero-tariff tack was supposedly one of the counter-inflation measures proposed by Speaker Gloria Macapagal-Arroyo and other House leaders at a meeting with President Duterte’s economic team last week. “I do not know the source of Congressman Salceda’s information. But what I know is there are discussions and there are different opinions. (Agriculture) Secretary (Emmanuel) Piñol says it’s going to be war with domestic agricultural producers. And nobody is advocating zero in the Cabinet right now,” Roque said at a press briefing.

“I verified from the economic team, they listened to the suggestion of former president and Speaker GMA. But no one actually agreed that it should be done. So there’s a possibility of reducing tariffs, but no one in the Cabinet has told me that they will actually endorse zero tariffs,” he added. Roque cited the need to balance the need to lower inflation and to protect local producers. “I think (Trade) Secretary (Ramon) Lopez had a balanced view. Tariffs may be lowered but they cannot be removed,” the spokesman said. “What I know is no one is saying that there will be zero tariff. But the lowering of tariff is possible,” he added.

At a Senate hearing on Wednesday, Socioeconomic Planning Secretary Ernesto Pernia also talked about a planned EO – but only on reducing tariff and not removing it outright. Inflation, or the rate at which the prices of goods and services is rising, hit 5.7 percent in July, higher than 5.2 percent in June and the fastest in over five years – largely because of higher food and transport costs. Senators called on Malacañang to tread carefully on its plan to issue an EO on tariff cut.

“It will reduce prices definitely but at what cost to our local producers? Once the market is flooded with imported meat, fish and vegetables, prices will go down for sure following the law of supply and demand,” Sen. Panfilo Lacson said. “However, our local producers – the farmers, hog and fowl raisers – will also suffer since they may not be able to compete, considering their high cost of production,” he added.

Senate President Vicente Sotto III said he wants to see a matrix on the effect of tariff cut on local producers before an EO on the matter is issued. Sen. Joseph Victor Ejercito said the economic managers should study carefully the impact of zero or lower tariff on local rice farmers. “We need to be careful that it doesn’t cause more hardship to those in the agricultural sector,” he said. “Development is not a zero-sum game where one sector wins at the expense of another group,” Ejercito said. Sen. Francis Pangilinan called on the government to provide greater support for the rice farmers so that they could produce more. He suggested that the tariff collected from imported rice be earmarked for support services for the farmers.