Gov't considers eliminating rice tariffs
At A Glance
- The Department of Finance (DOF) has suggested a potential reduction in rice tariffs after the adjournment of Congress by the end of this month.<br>Finance Secretary Benjamin E. Diokno has proposed temporarily lowering the current 35 percent rice import tariff rates to a range of zero percent to 10 percent to control rising rice prices.<br>The President can lower tariffs through an executive order, but only when Congress is not in session.<br>Section 7 of RA 11203 allows the President to adjust rice import duty rates within certain limits, with changes taking effect 15 days after publication.<br>The Tariff Commission can begin hearings on the proposed reduction while waiting for Congress to adjourn.<br>The reduction in tariffs will impact government revenues, with the Bureau of Customs having collected P16.8 billion in rice tariffs from January to Aug. 26.<br>Giving up tariffs can result in lower inflation and bring greater benefits to the people.
The Department of Finance (DOF) said the government may lower rice tariffs once Congress adjourns by the end of this month.
Finance Secretary Benjamin E. Diokno said the economic team recommended a temporary decrease in the current 35 percent rice import tariff rates to address the rising prices of rice.
The proposed reduction would range from zero percent to 10 percent for both ASEAN and the most-favored nation (MFN), according to the DOF chief.
Diokno said the President can lower tariffs through an executive order, as long as Congress is not in session.
Republic Act (RA) 11203, or the "Rice Tariffication Law,” grants the President the ability to modify rice import duty rates within set boundaries.
However, this authority can only be exercised when Congress is not in session, and any adjustments made will take effect 15 days after they are published.
Diokno said the Tariff Commission can begin holding public hearings on the proposed reduction while Congress is still in session until Sept. 29.
“By this time, it might be possible to hold a hearing. They said you can adjust it during recess, but for now, you can conduct hearings,” Diokno told reporters during his Chat with SBED briefing last Friday, Sept. 8.
However, the reduction will impact government revenues. Based on the latest data from the Bureau of Customs, the agency has collected P16.8 billion in rice tariffs from January to Aug. 26.
“In government, you have to address many things simultaneously. You cannot just protect it [revenue]. If we give up tariffs, it will lead to lower inflation and bring greater benefits to the people,” Diokno said.
He said the loosened rice tariffs would be in effect for over three months.
Last Sept. 5, the National Economic and Development Authority (NEDA) said the government was considering the reduction of import tariffs for rice as a measure to address the significant increase in the price of the staple food.
NEDA Secretary Arsenio M. Balisacan said he called for a review of the 35 percent tariff on rice in order to reduce consumer costs while considering the impact on local producers.
“To partially counterbalance the rise in global prices and alleviate the impact on consumers and households, we may implement a temporary and calibrated reduction in tariffs,” Balisacan said in a statement.
In August, the inflation rate for rice increased to 8.7 percent from 4.2 percent in July due to lower grain output caused by El Niño and the export bans imposed by major rice exporters like India and Myanmar.