NEDA pushes amended Agri Tariffication Act

To make cheaper rice available

The National Economic and Development Authority (NEDA) has remained persistent in pushing for the passage of the amended version of Agricultural Tariffication Act as this could pave the way for cheaper retail price for rice.

Amending Republic Act (RA) No. 8178, otherwise known as the Agricultural Tariffication Act of 1996, will make up for the lifting of the quantitative restriction (QR) on rice imports through the imposition of 35 percent tariff on rice coming from member-countries of the Association of Southeast Asian Nations (ASEAN) like Thailand and Vietnam.

The amended bill already passed the House of Representatives but has remained hanging in the Senate.

“About 93 percent of Filipino households are rice consumers and they stand to benefit from lower price of rice. It is high time that the bill amending the two-decade-old law is passed,” Socioeconomic Planning Secretary Ernesto Pernia said in a statement on Friday.

Passage of the amended Agricultural Tariffication Act is expected to ease the temporary inflationary impact of the newly implemented tax reform law, besides world oil prices, as well as increase savings of a Filipino household, according to NEDA.

Based on the agency's preliminary estimate, headline inflation rate would be reduced by 1 percentage point if the domestic wholesale rice market reduces its price to the level of imported rice.

Even with just a R1.00 per kilo reduction in the wholesale price of rice, headline inflation rate would also be reduced by 0.3 percentage points.

At 35 percent tariff rate, the landed cost of imported rice, particularly from Thailand and Vietnam, along with its transport cost to the local market would be around R30.30 per kilogram. This is about R4.31 lower than the domestic wholesale price of regular milled rice.

The price reduction of R4.31 per kilogram will enable a Filipino household of five to save as much as R2,362 per year.

"This amount of savings could mean a lot to ordinary Filipinos especially to those struggling to make ends meet,” Pernia said.

Pernia explained that this amount of savings is equivalent to about 13 percent of a household’s average rice expenditure of R17,921 as indicated in the 2015 Family Income and Expenditure Survey.

Since the Philippines became a member of the World Trade Organization (WTO) in 1995, it had secured a waiver to extend the imposition of QR on rice imports several times to allow local farmers to prepare for competition.

With the expiration of the Philippines’ “Waiver on the Special Treatment of Rice” last 30 June 2017, there has been increasing pressure from World Trade Organization (WTO) member countries for the Philippines to fulfill its obligation to tariffy rice.

And the President Rodrigo Duterte’s issuance of Executive Order (EO) no. 23, series of 2017, which extended the concessions accorded to selected WTO countries, does not provide full guarantee that the Philippines will not be subjected to dispute in the coming months.

Meanwhile, Secretary Pernia noted that the tariff revenues to be generated from rice tarrification will be plowed back to local farmers through the Rice Competitive Enhancement Fund (RCEF) to support projects that will modernize the rice industry and enhance its efficiency.

Part of the fund will be used to directly support rice farmers, especially those who will initially be displaced by the removal of the QR, to diversify into other economic activities.