President Ferdinand Marcos Jr. himself stated the reason in Administrative Order 20 (AO 20) issued on April 18 “to help ensure food security, maintain sufficient supply of agricultural goods in the domestic market, and improve local production.”
He directed the further streamlining of administrative procedures and policies, and removal of non-tariff barriers on the importation of agricultural products.
What will AO 20 streamline?
AO 20 removed non-tariff barriers, which are “policy measures, other than customs tariff, that restrict trade, including but not limited to quotas, import licensing systems, regulations, and red tape.”
It directed agencies to simplify procedures and requirements in licensing, cut down processing time of importation applications, and exempt licensed traders from submission of registration requirements, and instructed the Bureau of Customs to prioritize the unloading and release of imported agricultural products
The president wanted the Agriculture Department to allow entry of certain agricultural products beyond the authorized minimum access volume (MAV), and reduce or remove related administrative fees. MAV sets quantity limits on imports with lower tariff rates.
He also ordered fewer procedures and requirements for the issuance of sanitary and phytosanitary import clearances (SPSICs) to make sure products are safe for consumption.
“All SPSIC applications not acted upon within the prescribed period shall be deemed approved,” AO 20 stated.
According to the order, agencies must streamline procedures in importing sugar and fish products within 30 days, and the agriculture department must improve logistics, transport, distribution and storage of imported products.
‘Managing supply and demand’
RCBC chief economist Michael Ricafort said AO 20 is “a matter of speeding [up]” the importation process to complement Executive Order 50, which was issued in December 2023, that extended lower tariffs for rice, corn, and meat products such as pork.
He told NewsWatch Plus that “timing is of the essence” in managing supply and demand. “It’s really related to paperwork, expediting the time, because these slow things down on the administrative side of things… anything that would be a hindrance for timely importation would be prioritized without necessarily compromising, for instance, the health standards,” he added.
A number of lawmakers questioned AO 20, especially on its impact to farmers and local producers.
Agriculture Secretary Francisco Tiu Laurel Jr., in a recent House briefing, said his team was not consulted in crafting AO 20, which he called a “band-aid solution.” Marcos appointed Laurel as agriculture chief in November 2023 after more than a year of heading it in a concurrent capacity.
Laurel said he asked the president for 90 days to craft the implementing rules and regulations of the order.
Would AO 20 bring down food prices?
Meanwhile, Ricafort said, “It’s an entirely different thing also to make sure that the benefits of reduced prices are felt by the consumers.”
The president’s campaign promise to bring down rice prices to P20 per kilogram remains an aspiration even as officials have said bringing the price to this level is difficult to achieve.
The greater majority of Filipinos have yet to afford the staple even with the Rice Tariffication Act, which allowed the unlimited entry of rice imports supposedly to help reduce prices since 2019.
Marcos said he would certify as urgent proposed amendments to the law. Two committees in the House of Representatives approved a bill that would restore the role of the National Food Authority in price stabilization and supply regulation.
In a statement, the National Economic and Development Authority (NEDA) showed that retail prices for onion, sugar and rice remain high.
“Higher prices and faster inflation indicate that domestic production is insufficient to meet the demand for key food commodities,” NEDA Secretary Arsenio Balisacan said.
According to the Philippine Statistics Authority, inflation was at 3.8% in April, a tad higher from the previous month’s 3.7%. The PSA said this was driven by food and transportation costs.
It also reported that agricultural output was at P428.99 billion in the first quarter, reflecting a relatively flat year-on-year growth rate of 0.05%, with declines in the production of crops, livestock, and fisheries.
More Filipino families also experienced involuntary hunger at least once in the first quarter of 2024, a Social Weather Survey poll found.
The pollster said the hunger incidence rate rose to 14.2% in March 2024 from 12.6% in December 2023. It added the figure was “the highest since 16.8% in May 2021.”
Stopgap measure
AO 20 was issued as the country suffers from the El Niño phenomenon and local government units have declared a state of calamity because of agricultural damage. The order also addresses supply issues facing the hog industry from the impact of the African Swine Fever (ASF).
Ricafort said import policies such as AO 20 should be temporary and only as a stopgap measure. “It’s a mechanism that will always be there but again it really depends on the agricultural product and the nature [of] the challenge, like ASF has been there for quite some time already, for more five years already and even before the [COVID-19] pandemic,” he explained.
He said importation should not coincide with the harvest season or during the seasonal increase in output “because the priority would [be] the local farmers and local producers.”
Agricultural group Kilusang Magbubukid ng Pilipinas said the government is “making another economic misstep with its policy of unhampered importation.” It also said the order “will only benefit importers and even smugglers.”
Balisacan said “neither NEDA nor the government is biased toward importation.”
