The bill seeking to impose tariffs on rice imports in lieu of quantitative restrictions (QRs) has gained the full backing of the business sector, with several groups sending their expressions of support for this consumer-friendly measure to Malacañang, the Department of Finance (DOF) said.
According to DOF Assistant Secretary Antonio Joselito Lambino II, these organizations have forwarded a copy of their joint statement expressing their support for the rice tariffication bill to Finance Secretary Carlos Dominguez III last month.
“Consumers must be freed from food supply apprehension and provided with price stability at an affordable level. This measure will address those concerns through free and open competition,” they said in their joint statement.
The joint statement was signed by the Management Association of the Philippines (MAP), American Chamber of Commerce of the Philippines (AmCham), Bankers Association of the Philippines (BAP), Financial Executives Institute of the Philippines (FINEX), Foundation for Economic Freedom (FEF), Judicial Reform Initiative (JRI), Makati Business Club (MBC), Philippine Investment Funds Association (PIFA), and the Semiconductor and Electronic Industries in the Philippines Inc. (SEIPI).
“We, the undersigned business and professional organizations, hereby strongly support ongoing efforts and measures of the administration to liberalize the economy and thereby unleash its full potential to ensure sustainable, robust and inclusive economic growth, while ensuring better quality of life for our people through affordable food,” they said in their statement.
"The need is to balance the interest of both producers and consumers,” they added. “One key measure of this effort is the rice tariffication bill approved by both Houses of Congress. This bill is intended to decisively and quickly address the rice supply disruption problem and concomitant high prices experienced last year to the detriment of consumers.”
The bill, which was ratified by both the Senate and the House of Representatives in December last year, was transmitted by the Congress to Malacañang last Jan.15 for the signature and approval of President Duterte. The President, who has certified the bill as urgent last year, can opt to sign the enrolled bill or allow it to lapse into law 30 days after its submission by the Legislature, as provided under the Constitution.
In their joint statement, the business groups said that upon enactment, the rice tariffication law will help “harness the financial resources, management expertise, logistics support, and extensive nationwide distribution system of the private sector to ensure food security, particularly of the most important food staple—rice.”
They also made it clear that rice farmers will be protected from unfair competition through the imposition of a 35 percent import tariff on imported rice.
“We urge the sustained provision of essential support services and facilities--irrigation, better seedlings, modern growing and efficient harvesting technology, safe agricultural chemicals and post-harvest facilities by the government to further assist the farm sector to be more productive and increase rural income,” the joint statement further said.
They said that on the part of consumers, maintaining a strategic reserve of rice stocks is necessary to guard against supply dislocations that may arise in case of natural calamities, climate change and price disruption in the global rice market.
“Earmarking and judicious utilization of the rice import tariff revenue for these purposes will greatly help attain these objectives,” they said.
Led by Dominguez, the Duterte administration’s economic team has long called for the liberalization of rice imports by replacing QRs with tariffs.
Amendments to the Agricultural Tariffication Act will achieve this purpose, which the Congress has done by fast-tracking the approval last year of the rice tariffication bill that President Duterte had endorsed as a priority measure.
According to the state economic team, the shift to import tariffs will help reduce price prices by P2 to P7 per kilo and further ease the impact of food supply issues on inflation.
The contribution of rice to inflation multiplied 10 times to 1 percentage point when inflation surged to 6.7 percent in September and October last year. The full year contribution of rice to inflation was 0.57 percentage point in 2018.
Inflation has since eased to 5.1 percent in December after President Duterte put in place an array of measures to, among others, remove administrative constraints on food imports and reduce the gap between farmgate and retail prices of certain agricultural products.