Government to cut rice tariff to bring down prices
MANILA, Philippines — The head of the Marcos administration’s economic team is pushing to temporarily cut rice import tariffs to zero or just a maximum of 10 percent as early as October in a bid to arrest the continued surge in prices of the commodity.
In a briefing, Finance Secretary Benjamin Diokno maintained that there is a need to adopt a comprehensive approach to ensure that rice supply is adequate at affordable prices.
Diokno is proposing that the current 35 percent tariff rate be slashed temporarily to zero or just 10 percent at most.
This also comes after the National Economic and Development Authority called for a review of the existing tariff levels on rice. NEDA, however, has yet to recommend specific tariff rates.
“The reduction is forward-looking because the price of rice is going up globally,” Diokno said. “The problem here is that we cannot do this while Congress is in session.”
Based on the process, the Tariff Commission (TC) would have to conduct hearings before a draft executive order is submitted to President Marcos for signing upon the recommendation of the economic team.
According to the legislative calendar, Marcos can only issue an executive order (EO) cutting tariff rates once Congress takes a break starting Sept. 30.
Rice is also included in the existing EO 10 that subjected the commodity, alongside fresh, chilled or frozen swine meat, maize and coal to the most favored nation rates for 2023 after inflation spiked last year.
The measure, however, will expire by yearend.
Diokno clarified that as of now, rice is the priority of the government to have the tariff rates further slashed.
“Rice is the priority right now because it’s been the biggest contributor to the increase in inflation,” Diokno said.
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Data showed that inflation quickened to 5.3 percent in August, breaking six months of easing, with the headline rate largely driven by food and non-alcoholic beverages.
In terms of food commodities, rice and vegetables contributed the most following the onslaught of recent typhoons.
The finance chief noted that the reduced rice tariffs would likely last for a year, subject to a review after six months of implementation.
While the move could reduce collections of the Bureau of Customs, Diokno said the government cannot just think of revenues.
“The government addresses many things simultaneously. We cannot just protect our revenue [targets] and give up on lower tariffs if it will resort to lower inflation,” Diokno said.
He also argued that more people will benefit from the measure even as farmers are expected to be at the losing end.
“In government, you always think of the greatest good for the greatest number. We have more consumers than farmers. That is really the case,” Diokno said.
Louise Maureen Simeon - The Philippine Star
September 11, 2023