BusinessMirror April 24, 2021

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ROTARY CLUB OF MANILA JOURNALISM AWARDS

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BusinessMirror

www.businessmirror.com.ph

A broader look at today’s business Saturday, April 24, 2021 Vol. 16 No. 192

EJAP JOURNALISM AWARDS

BUSINESS NEWS SOURCE OF THE YEAR (2017, 2018)

DEPARTMENT OF SCIENCE AND TECHNOLOGY

2018 BANTOG MEDIA AWARDS

PHILIPPINE STATISTICS AUTHORITY

DATA CHAMPION

P25.00 nationwide | 12 pages | 7 DAYS A WEEK

MOVING ON MAV n

VLADIMIR GRIGOREV | DREAMSTIME.COM

What scuttling the controversial importation system could mean: it requires legislative action, could invite a response from trade partners, and means foregoing certain funds earmarked for agriculture.

A

By Jasper Emmanuel Y. Arcalas

BOLITION of the minimum access volume (MAV) system, a policy direction initiated by the Economic Development Cluster (EDC), would streamline import processes and curb possible corruption in bureaucracy. It may mean, however, foregoing funds earmarked for the agriculture sector.

Getting rid of the MAV system would also require legislative action since the measure was created by Republic Act 8178 or the Agricultural Tariffication Act of 1996, experts told the BusinessMirror. Based on the Philippines’s notification to the World Trade Organization (WTO), the country’s MAV system “cannot be abolished without legislative approval” since it was created by legislation. Former Agriculture Secretary Segfredo R. Serrano confirmed to the BusinessMirror that an amendment of RA 8178 is needed in order to abolish the MAV system. Serrano pointed out that if the country pursues abolition of the

MAV system, it will not entail a notification to the WTO since it is a “unilateral move that would not prejudice” any trade partners. However, Serrano noted that nothing will stop WTO trade partners from raising concerns at the multilateral body if the Philippines removes its MAV system, especially if they think they can leverage it. Finance Secretary Carlos G. Dominguez III earlier revealed that the EDC, which he chairs, has instructed the DA and the Department of Trade and Industry to “work towards” the “removal of the MAV system,” replacing it with appropriate tariff rates to regulate agricultural imports.

PESO EXCHANGE RATES n US 48.4020

(Related story: https://businessmirror. com.ph/2021/04/21/dominguez-tariff-mavoptions-were-suggested-by-edc/)

The instruction came as EDC identified that “government tariffs, low MAV quotas and non-tariff barriers to trade” were factors in the spike in prices of key food commodities, which contributed to higher inflation rate.

Reforms under way

AGRICULTURE Secretary William D. Dar said on Wednesday they are mulling over reforms in the country’s MAV system and are seeking a unitary tariff rate for in-quota and out-quota imports of concerned agricultural products. Dar confirmed to the BusinessMirror that reforms concerning the country’s MAV system are on the way to “streamline import procedures.” Dar said they are looking to remove the current MAV licensing requirements and implement a “first come, first served” policy on availing the existing quotas for certain agricultural imports. Dar also disclosed that the Department of Agriculture (DA) will request the assistance of the Cabinet-level interagency Committee on Tariff and Related Matters (CTRM) in coming up with a unitary rate for agricultural commodi-

ties that have existing MAVs. “The removal of MAV licensing requirements will streamline processes and ensure actual availment by MAV importers based on a ‘first to arrive’ principle,” he said via SMS. “We will request CTRM to assist in the unification of in-quota and out-quota tariffs inasmuch as there are now a few products that have unified rates,” he added. MAV is a commitment made by countries like the Philippines to the WTO to facilitate trade between countries by ensuring a guaranteed minimum volume of imports to enter their respective domestic markets at a lower tariff. The MAV is implemented in the form of tariff rate quotas, wherein imports within the quota (in-quota) are slapped with lower tariffs compared to out-quota volume. At present the MAVs for agricultural products are allocated among eligible importers, firms and companies based on their past MAV performances. Quota holders are also required to secure a MAV license. Certain agricultural products with existing MAVs have two-tier tariffs such as pork; here, in-quota imports are levied with 30-percent tariff, while out-quota volume has

a 40-percent tariff. However, certain agricultural products that have MAVs have achieved unified in-quota and outquota tariff rates today due to commitments made by the Philippines to the WTO. The products with MAV that already have uniform in-quota and

out-quota tariffs are: chicken, frozen or chilled (40 percent); turkey livers, frozen or chilled (40 percent); potatoes, fresh and chilled (40 percent); and roasted coffee beans (40 percent). The United States’ International Trade Administration noted Continued on A2

n JAPAN 0.4484 n UK 66.9932 n HK 6.2376 n CHINA 7.4566 n SINGAPORE 36.4226 n AUSTRALIA 37.3228 n EU 58.1695 n SAUDI ARABIA 12.9076

Source: BSP (April 23, 2021)


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