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The government is allowing the entry of more potato imports at a lower tariff
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No locally produced chipping potatoes are currently available for the manufacture of potato chips
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This has prompted local potato chips manufacturers to import their additional raw material requirements outside of the current minimum access volume at a tariff rate of 40%
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Among the biggest importers of chipping potatoes are Universal Robina Corp. of the Gokongwei Group of Companies; Leslie Food Corp.; and Liwayway Marketing
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Imports of chipping potatoes under MAV are levied with a 3% tariff but imports outside the MAV have a 40% tariff
Fastfood and snack junkies will still be able to get their French fries and potato chips at affordable cost thanks to the government allowing the entry of more imports of the staple at lower tariff.
The local demand for potatoes remains high, especially from snack manufacturers and the big fastfood chains which has French fries as regular top sellers in their menus.
The inter-agency Minimum Access Volume (MAV) Management Committee (MMC) doubled the allowable volume of chipping potatoes to be imported under MAV to 60,000 metric tons.
“No locally produced chipping potatoes are currently available for use for manufacturing of potato chips, prompting local potato chips manufacturers to import their additional raw materials requirements outside of the current MAV (minimum access volume) at a tariff rate of 40 percent,” the MMC said.
Among the biggest importers of chipping potatoes are Universal Robina Corp. (URC) of the Gokongwei Group of Companies; Leslie Food Corp.; and Liwayway Marketing Corp.
The three manufacturers are allowed to import the raw material at a lower tariff rate.
URC imported 24,881 metric tons (MT) of chipping potatoes in 2022, while Liwayway Food and Leslie Food imported 4,399 MT and 719 MT respectively, for a total of 30,000 MT.
Chipping potato imports under the MAV are levied 3% tariff, but imports outside the MAV are imposed a 40% tariff.
The country first opened an MAV for chipping potatoes in 2018 to cater to the needs of local manufacturers. The initial volume was 20,000 MT.
Previously, local food manufacturers opted to bring in finished goods of potato chips, which were subject to tariffs ranging from zero to 7%, depending on country of origin.
The US accounted for more than half of the imports.
Local potato chip manufacturers must allocate a minimum of P0.25 per kilogram of chipping potato that they import under the MAV mechanism. The funds collected are allocated for the development of the local potato industry.
