MANILA, Philippines—President Gloria Macapagal-Arroyo has issued two executive orders lifting tariff on imported flour and cement for six months in a bid to bring down the prices of bread and the cost of building homes.
The President said the zero duties would help stabilize the prices of bread and other baked food products, as well as ensure the adequacy of the supply of cement for the government's mass housing projects.
"A low flour price translates to lower bread price,'' Executive Secretary Eduardo Ermita told reporters in a briefing on Wednesday.
Trade Secretary Peter Favila, who announced the issuance of the two executive orders in the same briefing, said these would bring about lower bread and cement prices.
"Hopefully, we will be able to see the lowering prices of cement and bread,'' he said.
Under Executive Order No. 765, signed by the President on November 7, wheat in warehouses will be levied the Most-Favored Nation (MFN) rate of zero percent duty for six months.
On the other hand, EO 766, also signed on the same day, exempts cement in warehouses from levy under the MFN for six months.
At present, tariff on food wheat imports from Association of Southeast Asian Nations member-countries is three percent, while duty on the same commodity from non-Asean members is pegged at five percent.
Tariff on feed wheat import, used as animal feed, is seven percent.
The duty on imported cement from Asean countries is three percent, and the tariff on the same product from non-Asean countries is five percent.
With the zero tariff on flour, the government hoped to reduce the production costs of bread and other products which use flour as an ingredient.
"This is part of government intervention to ensure that prices remain in affordable levels,'' Favila said, in reaction to objections raised by industry leaders to the executive orders that could pave the way for the influx of cheap cement and flour products.
He added: "We have it six months and review it again. If prices go down at reasonable level... we can bring the tariff back.''
