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PIA Press Release

Commentary: PGMA's lifting of import tariffs on wheat and cement beneficial to consumers

By Renee F. De Guzman

San Fernando City, La Union (21 November) -- The recent order of President Arroyo to scrap import duties on wheat and cement even if its just temporary is a very appropriate and timely move amid hard times.

To consumers and the general public who have long been complaining of the unstable rising of prices of bread, poultry products and even cement, these government intervention is a very welcome respite.

Earlier, the government urged the flour millers and cement manufacturers to lower their prices in the face of sliding oil prices and wheat price in the global market. But this was unheeded as arguments were given especially by the cement industry which the government was unconvinced.

As President Arroyo explained when she signed on November 7 Executive Order 65 "Temporarily Modifying the Rates of Import Duty on Wheat Under Section 104 of the Tariff and Customs Code (TCC) of 1978 (Presidential Decree No. 1464), and Executive Order 766 "Temporarily Modifying the Rates of Import Duty on Cement and Cement Clinker Under Section 104 of Tariff and Customs Code of 1978", the government wants to ensure the stable prices of bread and other foods and help lower the cost of construction projects.

On the part of the government there is a need to ensure the stability of prices and adequate supply of cement to boost its infrastructure programs including low cost and mass housing projects and private construction projects.

The tariff on wheat and cement products will be reduced to zero 30 days after the EOs are published in newspapers and will be in effect for six months.

Trade Secretary Peter Favila said that the EOs would be reviewed after six months.

The President said in her order that a "reduction on tariff on food wheat would help stabilize the price of bread and other baked food products."

"A reduction on tariff on feed wheat help lower the cost of feed ingredients and keep the prices of poultry and livestock stable", she said.

She added that setting the rate on food and feed wheat at the same levels would help prevent technical smuggling.

EO 705 will also be subjected to the Most-Favored Nation (MFN) rate of import duty in accordance with the current schedules.

Current tariff on food wheat is five percent for ASEAN nations and seven percent for non-ASEAN economies. Feed wheat tariff is at seven percent for countries with MFN status.

In a related move, the Philippine Association of Flour Millers (PAFMIL) assured the public that they will be selling cheap loaf bread, for the whole month of December in the outlets to be determined by the DTI.

To avoid the dumping in the country of sub-standard cement from other countries as a result of the lifting of the import duty on cement the DTI is also setting up safety measures. (PIA La Union) [top]

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