By CHINO S. LEYCO
The duties from rice imports by private traders declined by nearly a quarter as of mid-February this year, the Department of Finance (DOF) said yesterday.
In a statement, DOF said that duties collected by the Bureau of Customs dropped 23 percent to P1.71 billion in January to February 14 this year from ₱2.22 billion in the same period last year.
The lower duties is owing to declined rice import volume during the period, the DOF said.
Based on the Customs data, there were only 209,320 metric tons (MT) of imported rice from January 1 to February 14, lower by 62 compared with 759,810 MT in the previous year.
Last year, the Customs collected ₱12.3 billion from the 2.03 million MT of rice imported by private sector.
To recall, the Philippines implemented Republic Act 11203, or the Rice Tariffication Law, in March last year. The new measure has imposed a minimum 35 percent tariff on rice imports in lieu of quantitative restrictions (QRs).
“Collections from rice imports of private traders since the enactment of RA 11203 in March 2019 will benefit palay growers as such revenues are earmarked for the annual ₱10-billion Rice Competitiveness Enhancement Fund (RCEF),” DOF said.
The fund was set up under RA 11203 to finance farm modernization by directly provide local growers with wider access to credit and training along with
funds for mechanization and inputs like fertilizer and high-quality seeds.
The excess of ₱10 billion collected for RCEF will also be used to finance other programs to boost the yields of farmers and improve their global competitiveness.
As a result of the liberalized rice trade, the average retail cost of the staple has, since its enactment, fallen by at least ₱9 per kilo. This trend has pulled down inflation as rice accounts for a sizable portion of the food expenses of most Filipino households.
With over ₱12 billion in import tariffs collected in 2019, Finance Secretary Carlos G. Dominguez III said the government “has ample means to do even more to make our agricultural production more efficient and extend direct aid to small farmers.”
Section 13(c) of the rice tariffication law states that 10 percent of the ₱10-billion RCEF shall be made available in the form of credit facility with minimal interest rates and with minimum collateral requirements to rice farmers and cooperatives.
The rest of the RCEF will be set aside for farm machinery and equipment; rice seed development, propagation and promotion; and rice extension services, as provided under RA 11203.
On top of paying tariffs, rice importers are required under RA 11203 to secure sanitary and phytosanitary import clearances (SPSIC) from the DA’s Bureau of Plant Industry (BPI), which assumed the food safety regulation function of the National Food Authority (NFA) under this law.
This requirement will ensure that rice imports are free from pests and diseases that could affect public health and local farm production.
Before rice tariffication, the National Food Authority regulated private rice imports and it was the chief importer of the grain, incurring a total of ₱187 billion in tax subsidies from 2005 to 2015 or an average of P19 billion a year.
Finance Undersecretary and chief economist Gil Beltran has pointed out in one of his economic bulletins that the NFA lost around ₱11 billion annually from rice subsidies before the RTL took effect.