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Palace orders ‘unimpeded’ rice imports

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PRESIDENT Rodrigo R. Duterte has ordered “unimpeded” importation of rice, adding to steps meant to ease inflation which has been hitting multiyear peaks, Malacañang’s spokesman said on Tuesday.

“… [W]e… had the 30th Cabinet meeting yesterday and I think the most important highlight of that meeting was the President approved unimpeded importation of rice as a measure to reduce inflation,” Presidential Spokesperson Harry L. Roque, Jr. said in a press briefing.

Mr. Roque recalled that, in a presentation in that meeting, Finance Secretary Carlos G. Dominguez III had said “that food items now are primarily responsible for and even increased inflation rate for the last month…”

Latest available Philippine Statistics Authority (PSA) data show headline inflation rising for the ninth straight month — and breaching the government’s 2-4% full-year target for 2018 for the seventh consecutive month — to a fresh nine-year-high 6.7% in September.

Rice alone accounts for 9.6% of the theoretical basket of widely consumed goods that is used to compute year-on-year overall price changes, making it a key contributor to inflation.

Hence, “the President ordered the unimpeded importation of rice,” Mr. Roque said on Tuesday.

“He wants to flood the market with rice so that even if the price of crude and other oil prices should go up still further, the people will have access to affordable rice,” he explained.

“The NFA (National Food Authority) no longer has any say on how much rice should be imported; anyone who can afford it and will pay tariffs will be allowed to import rice,” Mr. Roque added.

Wala na pong… mga (There are no more) restrictions. It’s a free market now for rice. Wala nang (There will be no more) accreditation, wala nang permiso (no need for permission) — well of course they need to procure import permits… But no one will have to approve the importation anymore, basta (so long as) they comply with the documentary requirements.”

Asked about a time frame for carrying out Mr. Duterte’s latest directive, Mr. Roque replied: “ [T]here was no time frame agreed upon, basta liberalize the importation of rice, full liberalization.”

He said that Mr. Duterte made the decision “after the Finance Secretary illustrated by way of graphs… that rice in fact was the most important commodity whose price increase… led to the spike in inflation.”

Agriculture Secretary Emmanuel F. Piñol insisted in an interview over the ABS-CBN News Channel that “… for those importing rice, government must not make it difficult for them, that was the essence of the statement of the President…”, adding that he sat “beside the President” when Mr. Duterte gave his directive.

Malacañang has been pressing Congress to approve a measure that would replace the current quota-based rice import scheme with a regular tariff system that is expected to slash retail prices of the politically sensitive staple by P7 per kilogram (/kg).

Latest PSA data show average retail price of regular milled rice at P45.83/kg in the final week of September, 20.45% more than the P38.05/kg a year ago, while that of well-milled rice was at P49.37/kg, up 16.80% from the year-ago price of P42.27/kg.

Sought for comment, Rolando T. Dy, executive director of the University of Asia & the Pacific’s Center for Food and Agri Business, said in a telephone interview that “allowing the private sector to import as long as they pay the tariffs… it’s good for the country.”

“… [I]f you are talking about the average of… over P40 of retail price of rice… We are talking about 10% decline of the retail prices.”

Malacañang last month unveiled a host of non-tariff measures aimed at bringing produce faster from farm to market.

Mr. Roque described Tuesday’s Cabinet discussion on rice as “very animated.”

“It was a very hot issue,” he said of rice.

“It was very animated… There was a principled and furious discussion about… the possible solution to the problem.”

While Mr. Roque declined to name the Cabinet men involved in “furious discussion” of the issue, Mr. Piñol, in previous television interviews, has smarted from statements by state economic managers attributing inflation’s rise partly on rice, arguing that the unabated increase in oil prices was a bigger factor. He agrees with other economic managers, however, that the problem with rice can be traced to a “miscue” of rice importation — caused by opposing views last year within the NFA Council itself on the best importation scheme — that in turn caused much-needed foreign rice to arrive in September rather than in this year’s first quarter.

MORE RICE IMPORTS EYED
Mr. Piñol had said on Monday that the Philippines will allow major rice retailers to import up to 350,000 tons of the grain, potentially bringing total purchases this year to 2.4 million tons which would be the second highest on record.

The Philippines buys rice largely from Vietnam and Thailand.

This year’s approved purchases would mark the largest rice imports by the country since 2010, when shipments reached a record 2.45 million tons amid fears of shortages following spikes in global food prices.

Mr. Piñol said the NFA has “approved in principle” the Trade department’s proposal to allow retailers to ship in additional volumes. The 350,000 tons that retailers can bring in would be on top of the 750,000 tons that the NFA is set to import before yearend. The NFA already bought 500,000 tons of rice earlier this year, and private traders were allowed to ship in up to 805,200 tons under an annual quota scheme. — Arjay L. Balinbin and Reuters