The Philippines: Lower Corn Tariffs Until December 2023


Apr 25, 2023 | Agricultural Markets News

Reading time: 2 minutes

FAS Manila forecasts increased MY 2022/23 Corn production because of the increased subsidy (e.g., hybrid seeds) to the sector, which is expected to increase national yields by 2 percent or more. The DA Corn Program budget was increased from PhP1.4 billion ($25.4 million) in 2022 to PhP5.02 billion ($91.3 million) in 2023. Industry and Government contacts also pointed to Corn area expansions in the Davao Region and Caraga. Coupled with conversions from banana plantations, as mentioned by industry contacts, this will add at least 70,000 hectares of Corn area to the total national figure for MY 2022/23.
To consider the northern Philippines, Statistics Authority 2021 Corn situation outlook showed that Ifugao province ranked first with 73,711 MT or 34% in the Cordillera Administrative Region, Kalinga ranked second with 66,720 MT or 31%, Apayao ranked third with 30,349 MT or 14%, Mountain Province with 25,133 MT (12%), Abra with 18,471 MT (9%), and Benguet with 483 MT or 0.22% share. Kalinga has a Corn production area of 12,343 hectares which are fully utilized during the rainy season.
Tabuk City, Pinukpuk, Tanudan, and Rizal are major yellow Corn-producing municipalities. Hence, most of the Corn interventions go to these municipalities. They also produce white Corn primarily for home and local consumption. With the growing demand for yellow Corn being the main ingredient for livestock and poultry feeds, the Corn production areas continue to expand even in the steep rolling areas.
Corn feed consumption is forecast to increase in MY 2023/24 because of the extension of lower tariffs until December 31, 2023. Corn is the preferred feed ingredient, especially for broilers and layers. In eggs, Corn provides the yellow pigment. FAS Manila increased the FSI Consumption in MY 2023/24 compared to the previous year of USDA Official in line with population growth. FAS Manila forecasts MY 2023/24 stocks to be flat compared to the previous marketing year.

Myanmar Debuts in the Philippines Corn Market


For MY 2022/23 (Jul to Feb), Myanmar’s Corn export to the Philippines ranked second with 0.24 million tons after Brazil (0.25 million tons). The following suppliers were Indonesia, Argentina, Vietnam, and the United States. According to AgFlow data, the US shipped 3,084 tons of Corn to the Philippines in Q1, 2023. Interesting to note is the emergence of Brazil and Indonesia in the Corn trade in the Philippines for MY 2022/23 July to February.
Brazil brought its shipment in November and December 2022, while Indonesia started in September 2022. FAS Manila forecasts lower MY 2023/24 Corn imports as compared to the previous marketing year because of an expected increase in domestic Corn production. FAS Manila raised its estimates for Corn imports in MY 2022/23, again attributed to the signing of Executive Order No. 10, Series of 2022, extending lower Corn tariff rates until December 31, 2023. EO 10, Series of 2023, maintains lower Corn tariffs of 5 percent in-quota and 15 percent out-quota until December 31, 2023, with MAV of 216,940 MT.
Per BPI data, there was a decrease of 14 percent for the imported Corn volume applied (from 961,875 MT to 829,524 MT) and almost no increase in SPSICs issued (from 594 to 596) for MY 2022/23 Semester 1 as compared to the previous year. The decline in the application could be attributed to higher Corn price quotes heading toward the end of the marketing year. Price quotes from industry contacts showed that Myanmar Corn shot up 11 percent while Indonesian Corn increased by 18 percent compared to 3 months ago. Interestingly, according to BPI data, 254,840 MT of Corn was arrived in December 2022 alone. This is an increase of 65 percent from BPI’s December 2021 Corn arrival of 154,260 MT.

Other sources: PIA

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