As plans to raise the tariff rate on rice imports begin to take shape, the Organization for Economic Cooperation and Development (OECD) is urging the Philippine government to reconsider and instead maintain the lower tariffs as a measure to keep prices stable.

In its annual report on global agricultural policies, the OECD welcomed the Philippine policy reducing tariffs on rice imports, describing the move as a “positive development.”

Effective July 8 last year, President Marcos signed Executive Order (EO) No. 62 to reduce the rice tariff from 35 percent to 15 percent.

The OECD, which serves as a forum for like-minded nations to develop policy standards, stated that the measure aimed to lower the cost of rice and help control inflation.

As the country’s main food staple, higher rice prices often contribute to quicker inflation rates given their substantial impact on the consumer price basket.

The Department of Agriculture (DA) said the 15-percent tariff rate, alongside other initiatives such as the implementation of a maximum suggested retail price, brought down prices of imported rice from over ₱60 per kilo last year to just around ₱43 per kilo this year.

EO No. 62, which also updates the tariff schedule for other key agricultural products, such as corn and pork, will remain in effect until the end of 2028.

The OECD recommended that the lower rice tariff be made permanent and possibly extended to other commodities facing supply constraints.

“The Philippine government should continue the path of tariff reductions for key agricultural products to facilitate trade, improve food security, and contain inflation,” the report read.

Rejecting any extension, local agriculture groups have been pressing the government to restore the tariff rate to its previous level, blaming the 15-percent rate for flooding the market with cheap rice and leaving farmers unable to compete.

In September, the Federation of Free Farmers (FFF) and the Magsasaka Party List filed a petition with the DA to impose provisional safeguard duties in addition to the 15-percent rice tariff.

Under the Safeguard Measures Act, the DA Secretary may impose safeguard duties in addition to regular tariffs if a surge in rice imports causes serious harm to local farmers.

The two groups estimate that the country's 2.5 million rice farmers could lose as much as ₱43 billion this year due to the influx of foreign rice.

Based on data from the Bureau of Plant Industry (BPI), 3.29 million metric tons (MT) of rice shipments have entered the country as of Oct. 23.

The entry of cheaper imported rice has been cited as a major driver of the sharp decline in farmgate prices of palay or unmilled rice.

Government monitoring showed that palay prices in some areas have dropped to as low as ₱6 per kilo, which is far below the production cost of ₱12 to ₱14 per kilo.

President Marcos has since implemented a temporary suspension of rice imports to boost palay prices.

Still, FFF and Magsasaka argued that the import ban would not prop up palay prices since traders would likely flood the market anew once the ban is lifted, noting that a tariff hike would be the more effective measure.

Agricultural group Samahang Industriya ng Agrikultura (SINAG) also said that the suspension offers “no real benefit” if the rice tariff continues to remain at a low 15 percent.

SINAG noted that the most urgent course of action is to revert the tariffs to 35 percent for imports from members of the Association of Southeast Asian Nations (ASEAN) and 50 percent for non-ASEAN imports.

The group said this would “discourage excessive imports, stabilize local farmgate prices, and restore a fair playing field for Filipino rice farmers.”

Agriculture Secretary Francisco Tiu Laurel, for his part, said the government is amenable to proposals to raise the current tariff rate, but only after the current import ban is concluded.

Speaking to reporters, Tiu Laurel said he is coordinating with Finance Secretary Ralph Recto and Special Assistant to the President for Investment and Economic Affairs Secretary Frederick Go to review the potential hike.

“They are running the numbers now from 20 percent, 25 percent, or 35 percent. Hopefully, we can make a decision before the closure of the ban,” he was quoted as saying last September.

The secretary had earlier stated that the DA supports returning the rice tariff rate to 35 percent, provided it is done in phases to mitigate the impact on the global rice market.