MAJORITY of Filipinos are expected to benefit from lower retail prices of rice should the agricultural tariffication law be amended, the National Economic and Development Authority (NEDA) said.
“About 93% of Filipino households are rice consumers and they stand to benefit from lower price of rice. It is high time that the bill amending the two-decade-old law is passed,” Socioeconomic Planning Secretary Ernesto M. Pernia was quoted as saying in a statement on Friday.
Mr. Pernia was referring to the Republic Act (RA) No. 8178, also known as the Agricultural Tariffication Act of 1996.
The passage of a bill seeking to amend RA 8178 will lift the quantitative restriction (QR) on rice imports and impose a 35% tariff on rice coming from Association of Southeast Asian Nations member-states such as Vietnam and Thailand, NEDA said.
According to NEDA’s preliminary estimate, headline inflation rate would be reduced by a percentage point if the domestic wholesale rice market reduces prices to the level of imported rice.
“At 35% tariff rate, the landed cost of imported rice, particularly from Thailand and Vietnam, along with its transport cost to the local market would be around P30.30 per kilogram,” NEDA’s statement read, adding that the price is about P4.31 lower than domestic wholesale price of rice.
With the price reduction, a Filipino family of five could save up to P2,362 per year, equivalent to 13% of its annual average rice expenditure of P17,921 indicated in the 2015 Family Income and Expenditure Survey.
NEDA added that once the law is amended, it is expected to ease the temporary inflationary impact of the tax reform law and the world oil prices, translating to increased savings of a household.
Inflation clocked in at 4% last month, its fastest reading in more than three years or since October 2014’s 4.3%. The government attributed the faster price increases to the implementation of the Tax Reform for Acceleration and Inclusion law which took effect last Jan. 1.
Mr. Pernia added that the tariff revenues to be generated will be funnelled back to Filipino farmers through Rice Competitive Enhancement Fund for the modernization and enhancement of the efficiency of the country’s rice industry.
Part of the fund will also directly support local farmers who will be affected by the lifting of the QR.
Since the entry of the Philippines to the World Trade Organization (WTO) in 1995, the country has been securing a waiver several times to extend the imposition of QR on rice imports in support of the local farmers’ preparation for competition.
With the expiration of the Philippines’ Waiver on the Special Treatment of Rice last June 30, 2017, there has been increasing pressure from WTO member countries for the Philippines to fulfill its obligation to tariffy rice, Mr. Pernia said. — KANV