FOLLOWING the approval of the extension of reduced tariffs on rice, pork and corn, analysts said that measure could offer some assistance in managing inflation but cautioned of potential risks. “It may help somewhat, but the longer we extend, the less likely the tariffs will be raised to their original levels,” Bank of the Philippine Islands (BPI) senior economist Emilio Neri said in a Viber message. “Local producers may feel the pinch from cheaper imports,” he added. During a Malacañang briefing on Thursday, Socioeconomic Planning Secretary Arsenio Balisacan announced that the National Economic and Development Authority (NEDA) Board approved the proposed executive order to extend the reduced most favored nation (MFN) tariff rates on specific commodities, such as pork, corn, and rice, covered under Executive Order (EO) 10, series of 2022, until Dec. 31, 2024. EO 10, issued in December last year, approved the extension of reduced MFN tariffs on rice, corn, pork and coal that were implemented by the previous administration to combat stubborn inflation. The lower tariffs on rice, corn and pork are scheduled to expire at the end of this year, while those for coal will remain in effect but subject to a periodic review. Balisacan stated that the extended tariff rates for pork will stay at 15 percent in-quota and 25 percent out-quota. For corn, it will be 5 percent in-quota and 15 percent out-quota, and for rice, it will remain at 35 percent both in-quota and out-quota. The NEDA Board also endorsed the Committee on Tariff and Related Matters’ proposal to change the review frequency of the tariff rate on coal from semi-annual to annual. In contrast, tariff rates for pork, corn, and rice will be reviewed semi-annually. “The proposed extension of reduced tariffs will help ensure an adequate supply of agricultural commodities and maintain stable and affordable prices, thereby better managing potential inflationary pressures,” Balisacan said. He added that this would encourage seeking alternative supplies, diversifying the country’s market sources, and establishing a forward-looking trade policy to respond effectively to potential supply and price shocks from challenges like the worsening African swine fever (ASF), expected impacts of the El Niño phenomenon, and ongoing increases in global commodity prices. While the extension could alleviate supply-side pressures, ING Manila Bank senior economist Nicholas Antonio Mapa suggested implementing structural reforms to enhance the production, storage, and efficient transportation of essential items, with the aim of strengthening food security. “Structural reforms are important to push our economy forward, but we reiterate that these reforms need not be undertaken only during periods of elevated borrowing costs,” Mapa said. “Thus, supply side measures, alongside structural reforms in the agricultural sector, will go a long way to ensuring price stability, food stability and inflation expectations, more than any rate hike could given the supply side nature of our recent inflation episodes,” he added.

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