Government urged to abolish MAV system

MANILA, Philippines — The government should consider abolishing the minimum access volume (MAV) system as the mechanism is prone to corruption and favors only few entities, a member of the central bank’s Monetary Board (MB) said.

“One of our recommendations is to get rid of the entire MAV system completely. The MAVs are relatively small and the process of allocating the MAV is prone to corruption,” MB member V. Bruce Tolentino told reporters on the sidelines of a recent forum hosted by the Asian Development Bank.

“So, we might as well increase access to everybody and reduce the access of favored parties,” Tolentino added.

Tolentino said he is looking at the MAV reform from a bureaucratic standpoint rather than from an economic one.

“I am looking at the MAV as more of a source of corruption rather than an instrument of bringing down prices,” he said.

“(Reducing food prices) is really more a question of the overall level of tariffs not that MAV because the MAV is very small,” he added.

One of the top 10 contributors to the country’s latest inflation print of 3.7 percent in March was meat and other parts of slaughtered land animals.

Given this, the Inter-agency Committee on Inflation and Market Outlook Food Subcommittee recommended the distribution of the remaining 76 percent of pork MAV “according to rules and regulations.”

Imports brought within the MAV are levied with lower tariff rates compared to imports outside the mechanism.

However, bulk of the country’s pork imports, for example, are imported outside the MAV mechanism since the MAV for the commodity is only around 52,500 metric tons.