Sun, June 26, 2022


Philippine economy chief warns Marcos not to scrap rice import law

President Rodrigo Duterte’s chief economic manager has warned against repealing the rice tariffication law (RTL), pointing to the big reduction in rice prices for Filipino consumers from allowing imports.

President-elect Ferdinand Marcos Jr has vowed to review the RTL, which lifts restrictions on rice imports.

Rice currently costs about 39 pesos (25.8 baht) per kilo in the Philippines – down from the 46/kilo during the 2018 inflation crisis. The crisis led to RTL’s enactment in 2019, which removed an import quota on rice that for decades protected local producers and raised the debt of the state-run National Food Authority (NFA) to about 165 billion pesos.

“The NFA monopolised rice importations before the [RTL], with a few private traders granted import permits that enabled them to control the price and supply of rice through hoarding and other manipulative practices,” Dominguez said.

The NFA was also granted about 11 billion pesos in tax subsidies yearly from 2005 to 2018, but rice prices did not go down as much.

Dominguez said the retail price of regular-milled rice spiked to 46.04 pesos/kilo in 2018, but since the law it had dropped to 39.13 as of April 2022 – down 6.91 per kilo.

“Freed from local entrenched interests that took advantage of the protectionist policy on rice for decades, this staple food is now more affordable, especially for low-income Filipinos who spend about 16 per cent of their total household budget on rice,” Dominguez said.

He pointed out that rice is no longer a major contributor to inflation.

With the private sector now given a free hand in importation, the government has also been able to raise 46.6 billion pesos in rice import duties since 2019.

As of April this year, the government through the Bureau of Customs collected P46.6 billion from rice import tariffs.

The Department of Finance (DoF) said rice import duties had “assured the government of continuous and sufficient financing support for the 10-billion-peso yearly rice competitiveness enhancement fund (RCEF)” for Filipino farmers hit by cheaper imports.

In particular, the RCEF was being “used exclusively to finance programmes that will sharpen the competitiveness of palay growers by providing them with easy access to fertiliser, farm machinery and equipment, high-yield seeds and cheap credit; and offering them skills training programs on farm mechanisation and modern farming techniques,” it said.

“Tens of thousands of rice farmers, and farmer cooperatives and associations have also attended workshops, technical briefings, and training sessions in 90 newly established and 43 enhanced farm schools all over the country,” the DoF added.

However, presumptive President Ferdinand Marcos Jr has pledged to reduce the rice price to 20-30 pesos/kilo and review the RTL, which he accuses of making life harder for Filipino farmers.

The Federation of Free Farmers (FFF) also refuted the DoF’s claims, arguing that rice prices fell only slightly after the government eased import controls.

Citing data from the Philippine Statistics Authority, FFF said prices of regular milled rice now average 37.60/kilo, lower than 39.02 in 2016 and 39.52 in 2017.

“Although RTL allowed the entry of cheaper imported rice, the savings were mostly captured by importers and traders and were not passed on to consumers. Also, most of the imports were for premium rice grades for sale to well-off consumers, not the more affordable grades that NFA used to import for the poor,” said FFF national manager Raul Montemayor.

“That is why poor consumers today are paying almost the same as in 2016 and 2017. To top it off, the 27-peso/kilo rice that [NFA] used to distribute has disappeared from the market,” he added.

The group claimed that economic managers were primarily responsible for the crisis in 2018, saying “they conspired in the NFA Council to prevent the NFA from replenishing its inventories until its stocks had shrunk to zero”.

The FFF has appealed to the incoming administration to undertake a “serious and factual review of the RTL and to amend the law as deemed necessary”.

Ben O de Vera, Jordeene B Lagare

Philippine Daily Inquirer

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Published : May 17, 2022