Two big farmers’ groups have sought the intervention of the Senate regarding the recently issued Executive Order (EO) 135, which temporarily reduced the import tariff rates for rice coming from non-ASEAN countries.
In their separate letters, the Federation of Free Farmers (FFF) and Samahang Industriya ng Agrikultura (SINAG) have both formally expressed their opposition against EO 135, which they said caught thousands of farmers by surprise.
For FFF, the reduction of rice import tariffs is totally unjustified and the claimed reasons for the issuance of the EO are baseless.
SINAG, on the other hand, said “like a thief in the night, we were all surprised to read EO 135 that significantly reduced the tariff rates on rice”.
In his letter to Senators, SINAG Chair Rosendo So questioned where the government gets the 50 percent tariff rate on rice from non-ASEAN countries when based on Republic Act (RA) 11203, the rate outside MAV is 180 percent.
Based on RA 11203, importers are allowed to bring in any volume of rice in the Philippines at any time provided they pay a 35 percent tariff based on the declared value of their imports if it’s coming from member countries of ASEAN region like Thailand and Vietnam. Outside ASEAN, the tariff rate will be higher at 180 percent.
“Why reduce to 35 percent both inside and outside MAV? Rice imports from Thailand and Vietnam are enough to cover any supply gap,” So also said.
For his part, FFF National Manager Raul Montemayor questioned the manner by which the tariff reduction “was surreptitiously and improperly done.”
Based on EO 135, President Rodrigo Duterte authorized the temporary reduction of the Most Favored Nation (MFN) tariff rates on rice imports to 35 percent from 50 percent out-quota and the 40 percent minimum access volume (MAV) tariffs on rice for a period of one year.
The adjustment, which was recommended by the National Economic Development Authority (NEDA) Board, was intended to “diversify the country’s market sources, augment rice supply, maintain prices affordable, and reduce pressures on inflation”.
The EO also took into consideration “the increase in global rice prices, and the uncertainties surrounding the steady supply of rice in the country.”
It will be recalled that during the last time the agriculture stakeholders, including SINAG and FFF, sought for Senate’s help about the low import tariff cut and higher minimum access volume (MAV) allocation in pork, the Senators took their side and had several weeks of disagreement with Duterte Administration’s economic team.
As a compromise, the Senate and the economic team agreed to make adjustments on both proposals in favor of the local hog raisers.
To recall, unimpeded rice importation is allowed in the Philippines through the enactment of the Rice Tariffication Law (RTL) or RA 11203 in March 2019.
In 2020, the Philippines imported rice from around 13 countries, including Vietnam, Thailand, Myanmar, Singapore, China, India, among others.
“Understandably, around 95 percent of our imports come from ASEAN countries, particularly Vietnam, not only because of the preferential tariff of 35 percent that we accord to them but also due to their proximity and the acceptability of their rice to our consuming public,” Montemayor said in the letter to Senators.
“The fact that we get relatively small imports from other countries like India and Pakistan is not primarily because of price, but most probably due to considerations about quality and reliability of supply,” he added.
He further said that both our rice inventories and projected domestic production figures point to stable supplies of rice.
The Philippine Statistics Authority (PSA) has placed the country’s rice inventories at 2.08 million MTs as of March 1, 2021, down only by 4.5 percent from March 1, 2020 levels.
In turn, palay output during the first quarter of the year jumped by nearly 9 percent compared to the same period in the previous year.
As for rice imports, Montemayor also pointed that there has been no significant decline in rice imports despite the rise in international prices of rice.
Some 610,428 metric tons (MT) of rice came in between January and March 2021, or only 3 percent lower than the volume brought in during the same period in 2020.
“Department of Agriculture (DA) Secretary Dar has repeatedly issued public statements that we have ample stocks. He has not made any statement alluding to any imminent or projected shortage in rice supplies,” Montemayor further said.