Lowering corn tariff expected to mitigate impact of surging fuel prices

THE Foundation for Economic Freedom (FEF) said reducing the tariff on corn imports to 5% for shipments exceeding the minimum access volume (MAV) will help cushion the blow from the ongoing fuel crisis, by lowering the cost of animal feed and making meat products cheaper.

“Now is the right time to act on this to mitigate the impact of the recent rise in oil prices, driven by the Iran-Israel-US conflict, on food prices brought about by higher transport costs,” FEF President Calixto V. Chikiamco said during the Management Association of the Philippines’ General Membership Meeting on Wednesday.

Philippine corn imports are subject to an MAV quota of 216,939 metric tons, which is admitted at a 5% tariff. Volumes exceeding the quota are charged 15%. The FEF proposal would effectively equalize the tariff treatment of all shipments, regardless of whether they fall within the MAV quota or not.

Yellow corn is a key component of animal feed, which constitutes a major proportion of the cost to raise animals.

Mr. Chikiamco said imports of corn will add to the supply of meat and poultry, thereby addressing the protein needs of the population and reduce malnutrition and stunting.

As of 2023, about 23.6% of Filipino children under five years were classified as stunted, with 15% underweight, the Department of Science and Technology’s Food and Nutrition Research Institute reported last year.

About 17.9% of children between five to 10 years and 20.7% of adolescents are stunted.

“Stunting is driven not only by calorie deficiency but also by chronic lack of quality protein and essential nutrients,” Mr. Chikiamco said.

The Department of Agriculture estimates that corn accounts for up to 55% and 65% of livestock and poultry feeds, respectively. It is also a key ingredient in fish feed.

Reducing the tariff for shipments exceeding the MAV quota to 5% would raise pork production by 2.6% and chicken production by 2.2%, Mr. Chikiamco noted, citing a 2025 study by the Philippine Institute for Development Studies.

The lower tariffs would also reduce the retail price of pork by 2% and chicken by 1.7%, Mr. Chikiamco said.

Charging a single tariff for corn imports would also help “address inefficiencies in the administration of the MAV and reduce graft and rent-seeking opportunities,” he added.

To cushion its impact on corn farmers, Mr. Chikiamco said the government can provide direct subsidies from tariff revenue.

Philippine corn imports are expected to hit 1.85 million MT in the 2025-2026 production season due to a decline in domestic production, the US Department of Agriculture said in December.

Asked to comment, Trade Undersecretary Allan B. Gepty said proposals to liberalize imports must consider the impact on domestic farmers.

“When it comes to our sensitive products, particularly agriculture products, we have been very mindful of the need to protect our farmers,” he told reporters on the sidelines of the event. — Beatriz Marie D. Cruz