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Rice import restriction extended

Posted on May 23, 2017

THE Philippines is keeping the quantitative restriction on rice purchases in place for three more years, limiting supplies from major sellers like Thailand and Vietnam, according to an executive order released on Monday.

The maximum volume of rice that private traders can ship in annually will remain at 805,200 tons until 2020, with the tariff also kept at 35%, the order signed by President Rodrigo R. Duterte on April 27 showed.

The Philippines, one of the world’s top rice importers, is supposed to lift the import restriction by July 1 this year under an agreement with the World Trade Organization (WTO). It was not immediately clear if Manila needs to seek another waiver from the trade body from its obligation to open up the domestic rice market.

In 2014, Manila won WTO approval for a waiver but, as part of the agreement, it pledged to increase the annual import volume from 350,000 tons and reduce the rice tariff from 40%.

Agriculture Secretary Emmanuel F. Piñol, who believes the Philippines could be self-sufficient in rice production by 2020, had been pushing for a two-year extension of the restriction, saying local farmers are not ready to compete with cheap imports.

The Philippines imports more than 1 million tons of rice every year, with Thailand and Vietnam its key suppliers.

Socio-economic Planning Secretary Ernesto M. Pernia had pushed for the lifting of the restriction, arguing that introducing competition in the domestic market would encourage local farmers to improve efficiency and bring down local prices.

Both Messrs. Piñol and Pernia did not respond to Reuters’ requests for comments on the executive order.

The Southeast Asian nation has kept the restriction in place since 1995 when it acceded to the WTO treaty. It has won three extensions since then.

The missive was numbered Executive Order No. 23 and was released yesterday simultaneously with three other executive orders that extended zero tariff rates on information technology products (IT) and capital equipment imported by enterprises registered with the Board of Investments, while setting a new tariff schedule in the next three years for other imported products under the Customs Modernization and Tariff Act (CMTA).

EO 23 now directs that agricultural products that are “entered or withdrawn from warehouses in the Philippines” to be still subject to the rates indicated in an earlier EO 190, which the new directive replaces.

EO 23 was released after the National Economic and Development Authority (NEDA) “approved the extension of the reduced rates of duty on agricultural products in EO No. 190 for another three (3) years.” -- Reuters and Ian Nicolas P. Cigaral