As-Delivered Press Statement on the 17th NEDA Board Meeting

Arsenio M. Balisacan, PhD
Malacañang Press Briefing
June 4, 2024

Good morning, everyone.

Yesterday, June 3, the NEDA Board, under the leadership of President Ferdinand R. Marcos Jr., approved the new Comprehensive Tariff Program for 2024-2028. This program calibrates the current tariff rates until 2028, a strategic move to ensure access and affordability to essential commodities—while balancing the interests of consumers and local producers—which is crucial for fostering rapid, sustained, and inclusive economic growth.

During its 17th meeting, the NEDA Board acted on the recommendation of the Committee on Tariff and Related Matters, or CTRM, to maintain the current rates on more than half of the tariff lines covering various agricultural and industrial products that have relatively low applied tariffs, particularly for raw materials and intermediate inputs used in manufacturing. The tariff maintenance will ensure access to inputs and support efforts to improve productivity and competitiveness. This measure will help our domestic industries by reducing the costs they incur for their inputs, enabling them to be more competitive, especially in the global market.

The Board also agreed to merge tariff lines on certain chemicals and chemical products, textiles, machinery, and transport equipment to simplify the tariff structure for more efficient customs administration and improve the ease of doing business.

The Board has also approved the CTRM’s recommendation to reduce the tariff on certain chemicals and coal briquettes to improve energy security and reduce input costs. Tariff reduction on coal will help ensure its availability at reasonable prices, thus supporting more stable electricity prices and supply in the country. Given our present energy constraints, this reduction will be timely as we steadily work toward implementing planned investments in transmission facilities and renewable energy infrastructure in the coming years. Meanwhile, the chemicals proposed for reduction are inputs to manufacture antiseptics, detergents, and medical research. Reducing the tariff on these inputs will help lower production costs and improve consumer welfare.

The reduced tariff rates on corn, pork, and mechanically deboned meat under Executive Order No. 50, s. 2023, were also maintained until 2028 to ensure a stable supply of these commodities, help manage inflation, promote policy stability and investment planning, and enhance food security.

For rice, one of the most critical components of Filipino households’ consumption baskets, the NEDA Board agreed to reduce the duty rate to 15 percent for both in-quota and out-quota rates from 35 percent until 2028. This decision aims to lower the price of rice further and make it more affordable. Based on the latest inflation report of the Philippine Statistics Authority in the past three months, rice contributed about two percentage points (or over 50 percent) to the headline inflation. Reducing rice tariffs is expected to bring down rice prices for consumers while supporting domestic production through tariff cover and increased budgetary support to improve agricultural productivity, especially as global rice prices remain elevated. Upward price pressures for rice are driven by the effects of the El Niño phenomenon that are felt worldwide, as well as increasing demand given our steadily growing population and economy.

We note that even at the reduced rate of 15 percent, the rice sector continues to enjoy comparatively high tariff protection from competitive imports as the tariff is higher than for the 90 percent of the total 11, 484 tariff lines under the ASEAN Harmonized Tariff Nomenclature (AHTN) 2022.

Moreover, the NEDA Board has retained the tariff cover for various other agricultural products. These include sugar, vegetables such as onions, shallots, garlic, broccoli, carrots, cabbage, lettuce, sweet potatoes, cassava, coffee substitutes, complete feeds, and feed preparations.

We also note that extensive consultations and review by the Tariff Commission in line with the Customs Modernization and Tariff Act informed the recommendations of the CTRM to the NEDA Board. The comprehensive tariff review is conducted every five years.

This new multi-year tariff schedule aims to help our economy achieve and balance several critical policy objectives. The multi-year horizon seeks to promote transparency, predictability, and policy stability. It will enable our domestic industries to undertake medium- to long-term planning to enhance productivity and competitiveness, facilitate trade, and contribute to favorable outcomes in international trade agreements while ensuring consumer welfare and protection, especially in the near term as we still confront upside risks to inflation.

The President will issue an executive order to implement this new tariff program.

Along with a liberalized policy regime for crucial food commodities to help mitigate the impact of commodity shocks on local prices, we recognize the necessity of effectively implementing long-term and permanent solutions to modernize and improve the productivity of the agricultural sector. This thrust is crucial to a comprehensive and sustainable response to supply constraints and food inflation. Indeed, the Marcos Administration has prioritized agricultural development, as demonstrated by the increased allocation of resources to the sector. The DA budget for example, has increased by 69 percent for 2022 to 2024, compared to its average appropriation for 2017-2021.

During the meeting, NEDA also reported the status or progress of implementing the Infrastructure Flagship Projects, or IFPs, under the Build-Better-More Program as of the first quarter of 2024. During the President’s SONA in July 2023, the President emphasized these projects as crucial elements to enhance economic efficiency and drive nationwide economic progress through improved infrastructure.

The progress made in developing our infrastructure has been substantial. Since the President’s State of the Nation Address last year, we have completed three projects, given the green light to six more, and currently have eight under construction. These achievements demonstrate significant headway in enhancing the country’s infrastructure. This advancement indicates a promising trajectory toward achieving nationwide infrastructure improvement and economic growth goals.

For more information about the government’s infrastructure flagship projects, you may visit the IFPs dashboard on the NEDA website.

As we progress, we remain dedicated to collaborating with stakeholders to address the key constraints and issues raised in various local and international platforms and venues. We will work closely with the entire government and engage the private sector, for we truly believe that the most effective solutions capitalize on the unique strengths of both sectors. Together, we strive to build a nation that is not only economically robust but also prosperous, inclusive, and resilient—a legacy that will last for decades to come.

Thank you.

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