IN DECIDING TO defer any decrease in the current tariff on rice imports until at least November, the newly-renamed Department of Economy, Planning and Development (nee National Economic and Development Authority) said its consultations with the Department of Agriculture were not meant to recommend changes in the tariff structure but just to find out what happened.
The DepDev said because inflation has been easing, it sees no need to recommend to the President lowering the current 15 percent tariff on imported rice, to the chagrin of local farm groups that have been pushing for the return of tariffs to 35 percent to better protect their interests.
DepDev said it wants the tariff unchanged until November as it seeks for a “win-win” solution that balances inflation control with protecting local farmers, reported Reuters.
“Not in the immediate [term], but most likely by November,” said DEPDev Undersecretary for Policy and Planning Rosemarie G. Edillon on Wednesday. “After four months, we will submit the study to the President.”
SLASHED IMPORT DUTY
The lower tariff is contained in Executive Order (EO) No. 62, which took effect in July 2024 and slashed the import duty on rice to 15 percent from 35 percent until 2028. The EO mandates a review every four months to assess its impact, Business World noted.
The announcement comes amid a petition from farmer groups, including the Samahang Industriya ng Agrikultura, to go back to the original 35 percent duty to shield local producers from the influx of cheaper rice imports.
‘The lowered tariff appears to be achieving its inflation-control goals. Rice prices dropped by 14.3 percent in June, improving from the 12.8 percent decline in May … It was the sharpest drop since 1995.’
GRADUAL INCREASE
The Department of Agriculture, meanwhile, said it would recommend a gradual tariff increase during the next harvest season.
Edillon said they met to discuss the review and petition, and they agreed that the periodic review is meant to report on what has happened, not to make recommendations at this stage.
The lowered tariff appears to be achieving its inflation-control goals. Rice prices dropped by 14.3 percent in June, improving from the 12.8 percent decline in May, according to the local statistics agency. It was the sharpest drop since 1995.
STABLE SUPPLY
Rice supply also appears to be stable. As of June, the country’s rice inventory reached 2.24 million metric tons (MT), 3.5 percent more than a year earlier. “Most of them are still in the warehouses. And we had the bumper harvest, actually, for the first half,” Edillon said.
She added that the rice import volume would be capped at 3.5 million MT for the year.
The government is also exploring more measures to support farmers, including enhanced access to the Rice Competitiveness Enhancement Fund, which provides planting assistance.
The DEPDev is also participating in discussions on whether to restore the regulatory powers of the National Food Authority (NFA), which was stripped of many functions following the Rice Tariffication Law.
DRAFT BILL
Speaker Ferdinand Martin G. Romualdez said the House of Representatives is ready to act on a draft bill that seeks to reinstate the NFA’s market functions once it reaches the chamber.
The DA has said the draft legislation includes provisions for the NFA to manage buffer stocks, regulate rice marketing and set floor prices for rough rice.
“I think at that time, the context was different. So NFA was so much in debt. It was really bleeding, hemorrhaging,” Edillon said, referring to the agency’s former monopoly on imports. “It was not really fulfilling its mandate… What we need to consider now is how the market has adjusted to the new regime.”
She also acknowledged the challenges in setting floor prices. “It will be very tricky though, operationalizing it and even estimating it. But yes, that’s something that we’re studying as well.”