Previous Executive Orders on Tariff Reduction
- Executive Order (EO) No. 134 (2021) temporarily reduced Most Favoured Nation (MFN) tariff rates on imported fresh, chilled, or frozen pork until May 17, 2022.
- EO No. 135 (2021) similarly reduced MFN tariff rates on imported rice until June 1, 2022.
Need for Extension and Expansion of Tariff Reductions
- The reduced tariffs on rice and pork products need to be temporarily maintained to sustain the objectives of EO Nos. 134 and 135.
- Objectives include augmenting supply, diversifying market sources, maintaining affordable prices, and ensuring food security.
- There is also a necessity to reduce tariffs on imported corn and coal to mitigate inflation and stabilize prices amid the global crisis.
- Reduction of tariffs on corn and coal aims to expand supply sources and lower prices of key commodities.
Legal Authority and Recommendation
- Section 1608 of Republic Act No. 10863 empowers the President to modify import duties, including increasing, reducing, or removing rates, in the interest of general welfare and national security.
- The National Economic and Development Authority (NEDA) Board endorsed ad referendum the temporary modification of MFN tariff rates on coal and corn and the extension of reduced MFN rates on pork and rice.
Specific Provisions of the Executive Order
Section 1: Imposes MFN tariff rates on articles listed in Annex A as per Section 1611 of RA No. 10863.
- These rates apply upon entry or withdrawal from warehouses for consumption.
Section 2: Repeals or modifies any inconsistent issuances, administrative rules, or regulations.
Section 3: Establishes a separability clause ensuring that if any part of the Order is invalidated, other provisions remain effective.
Section 4: Provides that the Order takes effect fifteen (15) days after publication in the Official Gazette or a newspaper of general circulation and remains effective until December 31, 2022.
Key Legal Concepts
- Use of executive authority to address economic challenges caused by international conflicts.
- Temporary tariff adjustment as a tool to control inflation and ensure national food security.
- Alignment with existing customs law (RA No. 10863) and reliance on economic agency endorsement (NEDA).
- Emphasis on maintaining tariff schedules consistent with international trade practices (MFN rates).
- Inclusion of a repealing clause to ensure legal clarity and a separability clause to uphold validity of the remaining provisions.