The National Economic and Development Authority (NEDA) said the government is 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 on Tuesday, Sept. 5.

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.

NEDA also noted that alleged hoarding incidents, artificial shortages, and speculative business decisions by market players may have further contributed to the rise in domestic retail rice prices.

The Foundation for Economic Freedom (FEF) has urged the government to remove or lower import tariffs on rice from 35 percent to 10 percent. 

The group, consisting of economists and businessmen, argued that Executive Order No. 39, which sets price ceilings of P41 per kilogram for regular-milled rice and P45 per kilogram for well-milled rice, would have negative consequences on Filipino consumers, farmers, and the overall economy.

“The price cap will harm consumers because it will drive supply away from the market, fuel a black market for rice, cause traders to cheat consumers by mixing inferior broken rice with regular and well-milled rice, and incentivize traders to hoard as the price ceiling is below their procurement and selling prices,” it said.

FEF said lower-income consumers, in particular, will bear the brunt of the reduced availability of regular milled rice in the market at controlled prices, as traders might instead offer well-milled rice at higher prices.

Based on the price monitoring data released by the Department of Agriculture, the current selling prices of local regular milled rice as of Sept. 4 range from P52 to P55 per kilo, while imported regular milled rice is at P41 to P43. 

Likewise, well-milled rice is priced between P48 and P56 for local varieties, while imported well-milled rice is at P45 to P52.

The Philippines is one of the world's biggest rice importers.