Diokno urges Senate to pass rice tariff bill this month

The Department of Budget and Management (DBM) has urged the Senate to immediately pass the rice tariffication bill within this month to address the increasing prices of Filipino staple food.

Together with the rest of the Economic Development Cluster (EDC), Budget Secretary Benjamin E. Diokno said that the passage of the bill will address the skyrocketing rice prices as it will cut its retail cost by around 14 to 17 per kilo.

“A shift from quantitative restrictions on rice in favor of tariffication will reduce its retail price by four to seven pesos,” Diokno said in a statement.

The EDC, which also includes the Department of Finance (DOF) as well as the National Economic and Development Authority (NEDA), said that government will immediately release 4.6 million sacks of rice in National Food Authority’s (NFA) warehouses to markets all over the country.

EDC is allocating 2.7 million sacks to Zamboanga, Basilan, Sulu, and TawiTawi.

About two million sacks of rice previously contracted is also expected to arrive before the end of this month.

In addition, the NFA Council authorized the importation of five million sacks of rice that will be arriving over the next six weeks.

Another five million sacks will be imported early next year.

The Philippine Statistics Authority (PSA) re-

leased recently that the headline inflation rate for August accelerated to 6.4 percent year-on-year.

The largest contributors to the significant increase in inflation include food items (rice, fish, vegetables, other meat), and electricity, gas and fuels, and personal transport.

Earlier, Finance Secretary Carlos G. Dominguez III said he wants to remove some functions of the NFA in regulating the supply of rice and allow a private sector-led importation of the Filipino stable food to stabilize its skyrocketing prices.

Dominguez said that the current rice importation system being implemented by the NFA is inefficient as it discourages legitimate businesses that have the capability to store and distribute rice to easily buy from abroad.

The culprit for the current high cost of rice, Dominguez believes is the sole authority given to the cash-strapped grains agency to choose who is allowed and not allowed to import rice.

Under the government’s commitment to the Word Trade Organization, the Philippines should allow the entry of at least 805,000 metric tons of rice at a tariff rate of 35 percent. Anything above the minimum access volume (MAV) is charged 40 percent.

“I’m really wondering, how come the companies that have warehouses and distribution networks, for instance the flour milling companies, why they’re not importing rice? Because it’s too troublesome to import rice, you have to go there [NFA] to file application and all these things,” Dominguez said.

“They don’t bother to do it [the application process] and besides they are not ‘allocated’ [by the NFA],” the finance chief added.

Instead of stabilizing the prices of rice in the local market, Dominguez said that NFA’s present licensing system is “choking” legitimate importers that resulted in skyrocketing retail costs particularly during the lean months for palay.

Dominguez suggested that the government’s regime being imposed on fuel imports should also be adopted in rice.

“The system we have now in fuel is very efficient, anybody can import fuel as long as you pay the tax. You don’t have to apply to anybody to get a permit,” Dominguez said. “Can you imagine if you started allocating the importation of fuel? Okay to import fuel you have to meet all these standards before I give you a permit to do it.”

Once the private sector is openly allowed to import rice, Dominguez said that “companies that are in retail business will be encouraged to do that, as you do that the tendency of the price is to go down because there will be sufficient supply.”

“If you want to import 1,000 rice, you go ahead and import it, that’s all we want and let anybody import. I’m telling you, the government is not very good at predicting the market, it’s terrible at that! So why do you allow the businessmen to do it on a daily basis?” Dominguez said.

The finance chief, meanwhile, warned the private sector that if “you want to import you [and] make money, good, [but if] you loss money, tough luck.”