Report Highlights:

Imports of pork and pork products increased by 43 percent in 2007, mostly made up of pork skin or rinds and fats, for use in meat processing. Majority of pork imports were sourced from Canada (32 percent), Germany (16 percent) and the United States (13 percent). Minimum Access Volume (MAV) utilization for pork increased from 5 percent to 19 percent last year, indicating an increase in importation of more premium pork cuts. In October 2007, the Philippine Department of Agriculture announced that it would be reviewing its MAV regulations, which is expected to be completed within the first quarter of 2008.

Tariff Rate Quota: Data from the Minimum Access Volume (MAV) Management Committee of the Philippine Department of Agriculture (DA) shows that in 2007, utilization rates of tariff rate quotas (TRQ) or MAV for pork increased from 5 percent in 2006 to 19 percent in 2007, indicating more imports of higher-value pork cuts, such as bellies and other unspecified prime cuts.

MAV usage for pork has been relatively low, due in part to the entry of large quantities of buffalo meat with a low tariff rate of 10 percent and illegally imported pork in the market. Buffalo meat, from India, has been traditionally used in the Philippines as a substitute for pork by the local meat processing industry. MAV utilization is expected to remain low due to the high in-quota duties for pork as well as high pork prices in the world market relative to the price of local pork. Majority of the pork imported in the Philippines is pork rind and pork fat.

WTO Commitments: Since 2005, the DA has continued to maintain 10th or final-year MAV levels under its Uruguay Round commitments. For pork HS 0203, the final-year MAV was 54,210 MT. The DA previously stated that it will continue to do so until such time as a new WTO agreement is reached. In October 2007, the DA announced that it would defer the distribution of 2008 MAV licenses, while it undertakes a review of MAV distribution guidelines. According to the DA, the review is being undertaken in order to allow new entrants and more entities to participate in the MAV system. On January 17, 2008, the DA released the MAV allocations for 2008, pending completion of the review, which temporarily disrupted trade for about 3 months. The review is expected to be completed in the first quarter of 2008.

Tariff Rates: In-quota and out-of-quota tariff rates for MAV commodities have not changed since 2005.

Imports: Last year, according to data from the Philippine Bureau of Animal Industry (BAI), total pork imports increased by 43 percent, mostly composed of pork rinds or skin and pork fats used by the meat processing industry. The Philippines imported about 32 percent of its pork requirement from Canada and about 16 percent from Germany. The United States supplied a little over 13 percent (10,351 MT), mostly pork offals, fats and other unspecified pork cuts.

Production: Live hog production grew by 2.72 percent in 2007 and 3.66 percent in 2006. Hog production is expected to expand in 2008, albeit only marginally, due to increasing cost of feeds. In 2007, the Philippines imported 273 head of swine for breeding from the United States, an increase of 174 percent from the previous year (USDA/ERS FATUS Reports). Already in January 2008, local hog associations reported the arrival of 230 live hogs imported from the United States (see GAIN RP8003).

Consumption: Philippine population is roughly 90 million and growing at a rate of 2.36 percent per year. According to the Bureau of Agricultural Statistics, annual per capita consumption of pork at 13.88 kg, grew by 1.39 percent in 2006, while consumption of pork offal grew by 3.57 percent.

Further Reading

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April 2008