Palace: Rice Tariffication Act assures lower rice prices

Published February 18, 2019, 3:44 PM

by Patrick Garcia

By Genalyn Kabiling and Mario Casayuran

Filipinos can expect lower prices of rice following the approval of a new law that imposes tariffs in lieu of import limits on the staple, Malacañang said Monday.

Presidential Spokesman Salvador Panelo (OPS / MANILA BULLETIN)
Presidential Spokesman Salvador Panelo

Republic Act No. 11203 or the “Act liberalizing the importation, exportation and trading of rice, lifting for the purpose the quantitative import restriction on rice, and for other purposes” was signed by President Duterte last February 14.

The rice tariffication law takes effect 15 days after publication in the Official Gazette or in a newspaper. A copy of the law was released to the media Monday.

“This law is expected to result in lower rice prices and help cushion the impact of inflation for the benefit of the consumers,” Panelo said.

Panelo also assured that the law has ample safeguards to protect the welfare of local farmers amid concerns raised by some groups about the influx of cheaper rice from abroad.

“The law, at the same time, protects our farmers from the emerging competition as a result of its implementation through a direct safety net and productivity support in the form of the Rice Competitiveness Enhancement Fund,” he said.

Under the new law, a 35 percent import tariff will be imposed on rice imports coming from the Association of Southeast Asian Nations (ASEAN). For non-ASEAN member states, the government will collect a 50 percent tariff for rice imports.

The law also states the creation of the Rice Competitiveness Enhancement Fund with an annual allocation of P10 billion for the next six years.

“It is the policy of the State to ensure food security and to make the country’s agricultural sector viable, efficient and globally competitive. The State adopts the use of tariff in lieu of non-tariff import restrictions to protect local producers of agricultural products,” it said.

At least 50 percent of the Rice Fund will be used for rice farm machineries and equipment; 30 percent for rice seed development, propagation and promotion; 10 percent for expanded rice credit assistance; and, 10 percent for rice extension services.

If the annual tariff revenues exceeds P10 billion, the excess revenues would be earmarked for rice farmer financial assistance, titling of agricultural rice lands, expanded crop insurance program on rice, and crop diversification program.

“The beneficiaries of the Rice Fund shall be those farmers and farm workers and their dependents listed in the Registry System for Basic Sectors in Agriculture and rice cooperatives and associations accredited by the DA,” the law read.

The same law also directed the DA and concerned government agencies to formulate and adopt the “rice roadmap” to restructure the government’s delivery of support services for the rice sector.

In a later Palace press briefing, Panelo said they still respect the right of any group to raise the legality of the new law before the Supreme Court.

“Regardless of the confidence or not of the Palace, the Palace welcomes any move from any sector questioning any act of the government. That is democratic process in work,” he said.

He admitted that he noticed that those who complained about the rice tariffication measure were “middlemen,” not farmers.

The chairman of the Senate economic affairs committee yesterday said he strongly believes that the Rice Tariffication Act recently signed into law by President Duterte is a strong counter-inflationary measure that would help increase the supply of affordable rice in local retail markets.

Senator Sherwin T. Gatchalian, also chairman of the Senate energy committee, said the effect of the law is to decrease the price of rice from P4.50 to P5.50 per kilogram, or estimated 11 percent to 12 percent decrease in the price of rice per kilo.

‘’This would translate to a decrease in the monthly headline inflation rate of 0.4 percent to 0.5 percent,’’ he said.

‘’At kasabay ng pagbaba ng presyo ng bigas ay mababawasan na rin ang mga pamilyang nagugutom,’’ he explained. (Alongside the reduction in the price of rice is the reduction in the number of hungry families.)

The law, according to Gatchalian, would enable the bottom 30 percent income families to attain food security by helping them put enough rice on their tables to keep their stomachs full and happy.

An average Filipino household with five members consumes rice at around 591.25 kilograms of rice per year, which means the Rice Tariffication Act would result to a savings of P2,661 to P3,252 per year. This is equivalent to an additional 73 to 91 kilograms of rice at the table.

Matitigil na din ang pananamantala ng ilang rice traders at retailers sa ating kababayan ngayong nalagdaan na ng ating mahal na Pangulo ang Rice Tariffication Act. Dahil wala na ang quota sa pag-angkat ng bigas, mawawala na rin ang mga hoarders na nagtataas ng presyo ng bigas,’’ he pointed out. (With this Act, the profiteering activities of some rice traders and retailers would be curtailed because there is no longer quota on rice importations. Hoarders who usually jack up the price of rice would no longer be in the market places.)