MANILLA, PHILIPPINES — The Philippines, through Executive Order 171, Series of 2022, has modified market access for Most Favored Nation (MFN) tariffs on corn and rice through Dec. 31, 2021, according to a Global Agricultural Information Network report from the Foreign Agricultural Service of the US Department of Agriculture (USDA).
The new corn tariff is expected to shift some but not all imports of duty-free wheat and barley for as long as it remains in effect and current price relationships hold.
“While it is unlikely to reduce feed costs let alone support expansion of the livestock and poultry sector given its duration and the new tariff level, it will also ease the Philippines’ reliance on Australian supplies,” the USDA said of the corn tariff.
Australian feed wheat currently holds a 15-percentage point tariff advantage over MFN corn; however, current landed price quotes for Australian feed wheat are also more than 15% that of available MFN corn supplies. As long as this condition holds, feed millers will prefer corn for its additional energy value.
Indian and Ukrainian feed wheat remain unavailable. Importers will need to switch back to relying on Australian feed wheat supplies shortly following the expiration of EO 171 on Jan. 1, 2023.
Meanwhile, USDA Manila Post also lowered its forecast for 2022-23 corn production to 7.9 million tonnes, reflecting reports of both reduced area and yields. Increasing production costs (e.g., fuel, fertilizer) have led producers to reduce area, in line with reports of reduced seed sales. In 2021-22, corn production was 8.2 million tonnes.
The new rice tariff effectively only provides a safeguard to ensure the Philippines will have access to alternative foreign supplies should Association of Southeast Asian Nations (ASEAN) members limit exports.
Following the expiration of Executive Order 135, Series of 2021, on May 21, 2022, EO No. 171, Series of 2022, reestablished lower MFN in- and over-quota tariff rates at 35% through Dec. 31, 2022. This again puts MFN tariffs at parity with ASEAN, which has facilitated growing but still modest opportunities for India and China to compete.