The Department of Agriculture (DA) said the Cabinet may reevaluate the proposed reduction in import duties on rice following feedback from various stakeholders regarding its potential implications.
In a statement, Agriculture Secretary Francisco Tiu Laurel Jr. said there remains an opportunity for stakeholders to provide input as President Marcos has not yet issued his executive order (EO) on the matter.
To recall, the National Economic and Development Authority (NEDA) Board, presided over by the president, approved a significant reduction in rice tariffs from 35 percent to 15 percent.
This measure aims to ease the burden of high rice prices on consumers, especially those from low-income backgrounds, and to address inflation concerns that have hindered the central bank from adjusting interest rates.
Despite the approval from the NEDA Board, Tiu Laurel said that President Marcos has not finalized the EO, allowing stakeholders in the agricultural sector a chance to express their viewpoints.
Acknowledging the industry's concerns, Tiu Laurel cited the importance of conducting periodic evaluations rather than sticking to a fixed reduction plan until 2028.
“In our discussions with industry representatives, the suggestions ranged from reviewing the tariff every six months to one year or even every four months,” Tiu Laurel said.
The DA chief highlighted concerns raised by industry players regarding the likelihood the tariff reduction will not result in significantly lowering rice prices as well as their apprehension that lower prices could adversely affect local farmers since traders could lower buying prices for palay.
Moreover, the reduction in tariff revenues could impede funding allocated for programs aimed at modernizing and mechanizing the rice industry, thereby jeopardizing efforts to enhance its competitiveness.
Industry players have warned that the assumption that rice prices will remain high until 2028 may not hold true if global market dynamics change.
They said global prices of the grain could drop if, for instance, India lifts its export ban non-basmati rice and production rebounds after El Niño.
Tiu Laurel said a balanced approach that considers both consumer welfare and the viability of local agriculture should be considered by the Cabinet when the tariff reduction issue is discussed.