Finance Dept Considers Duty on Feed Wheat

PHILIPPINES - The finance department does not oppose proposals to extend the zero duty on food wheat but is more cautious on doing so for wheat for animal feed.
calendar icon 29 June 2009
clock icon 3 minute read

"[We have] no objection [to the proposal extending the zero tariff on food wheat]. What is important is to make sure that there will be no misdeclaration of imports," Rosalia V. de Leon, chief of staff of Finance Secretary, Margarito B. Teves, told Business World Online in a phone interview last week.

"We have to make sure that we avoid smuggling and misdeclaration of feed wheat as food wheat. The [Bureau of] Customs is already doing something to monitor that," she added.

Ms de Leon, who is also officer in charge of the Finance department's international finance group, explained that feed wheat imports are now slapped a seven per cent duty.

She added that foregone revenues from the removal of duties on wheat are "small" but declined to cite figures.

Last November, Malacañang issued Executive Order 765, which suspended the imposition of tariffs on milling and feed wheat imports for six months from January to help importers cope with soaring commodity prices in the world market.

When asked if the department will also support the extension of the zero tariff on feed wheat, Ms de Leon said this will have to be studied further. "We have to see its revenue implications. We also have to look at compensating measures in case this [extension] is implemented," she said.

Prior to the issuance of the Palace order, the tariff rate on food wheat from members of the Association of Southeast Asian Nations stood at three per cent, and five per cent for those imported elsewhere prior to the Palace order.

The order expired on 21 June but Malacañang said it is considering extending a zero tariff on feed wheat by another six months.

The Cabinet Tariff Reform Matters Committee, however, has recommended the scrapping of duty-free feed wheat importation amid protests from hog and poultry farmers and feed millers who said this could raise meat prices.

The Agricultural Alliance, a group composed of hog and poultry farmers and feed millers, has claimed that feeds account for as much as 70 per cent of costs in raising hogs and poultry.

Corn farmers, however, oppose the extension of this privilege for feed wheat, which is an alternative to corn, concludes the Business World Online report.

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