The government could lose around P20 billion to P22 billion in revenues this year due to the 15 percent tariff reduction on rice imports, Finance Secretary Ralph G. Recto said.
Recto, however, said that this could be offset through lowering inflation, which would lead to possible cut on interest rates.
“Fifteen percent (tariff cut) for the year, ang tansya ko ay 20 to 22 billion,” He told reporters on the sidelines of a site inspection of the LRT Line 1 Cavite Extension.
“Hindi losses yan, we are reducing inflation and once we’re able to reduce inflation, hopefully we can reduce interest rates and that would create more growth,” he added.
He also affirmed that the approval of the tariff rate cut is just the state’s short-term development plan, as it goal is to ensure that investments are made to increase farmers’ productivity.
“We will continue to make those investments with our farmers, irrigation, mechanization, post-harvest facilities so the time will come we dont have to import our food requirements particularly rice. We are not abandoning our farmers,” the DOF chief stated.
Meeting with farmers to increase productivity
Recto also said that he had a meeting with farmers on the tariff cut, noting that their discussions are “moving forward” on increasing rice productivity.
“They are one of those that we are consulting how do we increase rice production. So what are there inputs, how should we spend the budget,” he said, noting the year-on-year budget rise of the Agriculture department, which is roughly around P200 billion this year.
The finance chief also said that the farmers group can recommend an amendment to Rice Tarrification Law (RTL) to suggest another P15 billion from the Rice Competitiveness Enhancement Fund.
“They can also suggest another P15 billion, halimbawa, because in the RTL they’re already getting more or less P20 billion in the beginning, and more or less P30 billion last year, so we can provide another 15, possibly,” he added.
The House of Representatives last month approved on second reading an amendment to the RTL to increase the fund from the current P10 billion to P15 billion.
Meanwhile, the state has so far collected P16 billion in rice tariffs this year to assist local farmers.