DOF: Rice expected to drop by P7 per kilo

The lifing of the quantitative restrictions (QR) on rice imports in favor of tariffs will bring down rice prices by as much as P7 per kilo, the country’s finance department estimates.

Finance Undersecretary, Gil Beltran in a statement, said a 35-percent import tariff on rice in lieu of restricting rice import volumes would encourage private traders to bring in the staple into the country, which would, in turn, allow the influx of cheaper rice in the domestic market.

The Philippines, according to Beltran, ranks fourth among five other Asian countries (Vietnam, Thailand, India, China and Indonesia) in terms of palay production cost.

The country’s average cost in producing this staple is about 10 percent higher than those of these Asian countries and 48 percent higher than the least cost producer.

With the quantitative restriction adopted by the country since 1995, it had allowed the country to limit the volume of rice imports with a tariff of 35 percent.

Imports outside the designated volume would result in a higher tariff rate.

On June 30, the QR expired after the economic managers earlier decided to allow its expiration by not applying for another extension before the World Trade Organization (WTO).

The QR lifting is expected to help free some 730,000 Filipinos from poverty who spend at least 20 percent of their budget for rice, the DOF said, citing studies done by the National Economic and Development Authority (NEDA). Reducing rice prices is crucial to poverty reduction because the staple is a major driver of inflation, said Beltran.

The DOF official said the tariffication would generate P27.3 billion, which the government can use to augment funding for social protection projects like cash transfers for the poorest families as well as for palay productivity programs. /