Dairy tariff collections fall to lowest in 3 years

MANILA, Philippines — Despite a record-high volume, the government collected less tariffs from imported milk and milk products last year as purchases of zero-tariff whey products rose on an annual basis.

Dairy tariff collections fell by six percent year-on-year to a three-year low of P2.21 billion, according to the National Dairy Authority (NDA).

NDA data showed that tariff collections from six dairy products (skim milk powder, buttermilk/butter milk powder, whey, condensed milk, curd and other products) fell on an annual basis.

Furthermore, the import share of whey, which usually enters the country at zero tariff, rose by eight percent in 2024 from seven percent in 2023, based on NDA data.

The NDA noted that whey and modified whey, whether or not concentrated or containing sugar or other sweeteners, have zero tariff while other types of whey are subject to a three percent tariff.

The aggregate tariff rate that the government slaps on imported dairy products is at three percent.

The total value of imported dairy products last year rose by nearly five percent to P80.08 billion from P76.3 billion in 2023, according to the NDA. The rise in value was due to the sharp spike in import volume coupled by a weaker currency, resulting in higher valuation of imports.

Imports of milk and milk products reached nearly 3.5 million metric tons in liquid milk equivalent (LME), a fifth higher than the 2.91 million MT-LME recorded in 2023, according to the NDA.

The NDA attributed the increase in imports to rising demand for milk products on the back of increasing population. The NDA also noted that the increase in the number of dairy exporters to the Philippines from 48 to 50 contributed to the hike in import volume.

Meanwhile, the NDA said the average foreign exchange rate last year stood at P57.29 to $1, about three percent weaker than the P55.63 to $1 recorded in 2023.

The government and lawmakers are closely monitoring dairy tariff collections because of a proposed 10-year earmarked fund aimed at developing the local meat, dairy and poultry sectors. The proposed fund will be bankrolled by the tariffs collected from imported meat, dairy and poultry products.

The country imports virtually all of its dairy supplies as local production remains miniscule. The NDA, tasked to oversee nationwide dairy production, plans to hike the country’s milk sufficiency ratio to five percent by 2028 from the current level of 1.5 percent.