Philippines seeks higher pork tariffs as farm-retail price gap widens

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Philippines seeks higher pork tariffs

Highlights

Department of Agriculture proposes raising pork tariffs by 10 percentage points by 2027, citing a widening P173 per kilogram farmgate-retail price gap.
Pork imports hit 323,057 metric tons in the first eight months, more than triple 2017 levels, as supply outpaces projected demand by 400,000 metric tons for 2024.
Domestic hog production rose 6% year on year to 841,206 metric tons in H1, but producers report losses of P50 to P90 per kilo due to falling farmgate prices.

Tariff proposal and pricing gap

As reported by BusinessWorld Online, the Department of Agriculture says the gap between pork farmgate and retail prices has reached P173 per kilogram, above the P150 level it considers historically reasonable.

Agriculture Undersecretary Asis G. Perez told Congress on Monday that, as of June, farmgate pork prices stood at P172 per kilogram while retail prices averaged P345. Between 2021 and June 2026, the national average gap between prices paid to farmers and by consumers grew 38%, which he said points to inefficiency in the market chain.

The department has submitted to the Tariff Commission a proposal to raise pork tariffs by 10 percentage points by 2027, to 25% for shipments within the minimum access volume quota and to 35% for shipments above the quota. Under the proposal, tariffs would return to 30% within the quota and 40% beyond it by 2028, from the current 15% and 25%, respectively.

Import pressure and industry impact

Officials say pork imports remain high even as local hog production recovers. Pork imports reached 323,057 metric tons in the first eight months, more than triple the 93,439 metric tons recorded in 2017, while pork meat and offal imports have nearly tripled from pre-African Swine Fever levels to 552,949 metric tons by the end of August.

Mr. Perez says demand is projected at 1.59 million metric tons this year, below projected supply of 1.99 million metric tons. At the current pace, he says the market could end the year with a 92-day supply balance, suggesting oversupply is building while import volumes remain substantial.

The Department of Agriculture says domestic hog production has been improving since last year and could rise further with the rollout of African Swine Fever vaccines. Hog production increased 6% year on year to 841,206 metric tons in the first half, but producers are still pressing for immediate tariff increases and a temporary import ban, saying farmgate prices have fallen to P90 to P120 per kilo and are causing losses of P50 to P90 per kilo, or about P5,000 to P9,000 per hog raised.

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