NPCC bats for importation to ease supply, higher prices

The inter-agency National Price Coordinating Council (NPCC) has batted for the importation of some commodities such as fish, rice, sugar, and vegetables at reduced tariff rates, perhaps a uniform rate of 5 percent in the meantime, to augment local production as tightness in supply of these commodities have driven prices higher.

This was raised by Trade and Industry Secretary Ramon M. Lopez at yesterday’s NPCC meeting, which took stock of the current situation of supply and prices of commodities in light of the worsening inflation rate which rose to 5.7 percent in July.

Lopez said the government is implementing a combination of measure to rein in inflation. This include making sure there is no shortage in supply, allow importation at uniform tariff of perhaps 5 percent for commodities in tight supply like rice, fish, sugar, feeds, and vegetables and even the mechanically deboned meat for canned manufacturers but imports should go directly to retail, market and endusers.

“That is the combination – bigger supply, lower tax and leading to lower prices,” he said.

Once this combination is implemented he said consumers can expect lowering in prices within two to three months.

“So, the solution is importation to augment supply and make sure this goes to retail, to market or user industries not select importers,” he said adding there is also timing in the importation so as not to conflict during harvest season. When it is off season, the government will allow importation.

He said that the 200,000 metric ton (MT) rice importation out of 250,000 MT have come in already and another 250,000 MT will be coming in to stabilize prices which now average between 140141 per kilo of regular rice. The lowest price of rice is 136 but the highest for regular is 144 a kilo.

“We all pray that oil prices will go down because that is the main factor, but the government within its control will make sure there is no shortage of supply,” he said.

He said that imposing tariff on rice and sugar will ensure enough supply and government revenues and level playing field to all, not just to a few traders and importers.

“Why select importers, just impose taxes and plowed back the taxes generated to industries like rice farm irrigation and machineries to increase productivity of farmers,” he added.

Lopez has also batted for open importation for sugar because the recent importation allowed by the Sugar Regulatory Authority was intended for industrial users and not for the retail sector.

On fish, Lopez did not indicate what kind could be imported but cited fish as among those with supply constraints, resulting in higher prices. If the current tariff on fish is 3-15 percent, he said a 5 percent tariff may be reasonable enough.

He said that the Department of Agriculture was amenable to this importation.

Lopez, however, said that the biggest factor affecting the rise in inflation was mainly due to the increasing prices of oil in the world market.

As such, the DTI is not looking at the removal of excise tax as a solution to rising prices of basic goods and commodities because it is not the main driver in the increasing prices of oil.