Unim­peded rice im­ports may hold back in­fla­tion

Manila Bulletin - - Editorial -

AF­TER nine straight months of ris­ing prices, the govern­ment took its first big step to stop the rise last Tues­day. It re­moved all re­stric­tions on rice im­por­ta­tions. Since food prices make up the big­gest part of in­fla­tion fig­ures and rice is the prin­ci­pal food item of Filipinos, unim­peded rice im­por­ta­tion should have an im­pact on the whole mar­ket sit­u­a­tion in the coun­try.

For years, rice im­ports had been con­trolled and lim­ited, with each trader need­ing to ap­ply and ob­tain an ac­cred­i­ta­tion per­mit from the Na­tional Food Au­thor­ity (NFA), then an or­der from the NFA Coun­cil on the vol­ume of rice to be im­ported. With this sys­tem, the govern­ment has sought to help Filipino farm­ers have a mar­ket for their har­vests.

A bill has been filed in Congress to re­place this sys­tem of re­stric­tions with a tar­iff of 35 per­cent on im­ports from South­east Asia and 180 per­cent on im­ports from else­where. But with the wors­en­ing price sit­u­a­tion in the na­tion’s mar­kets, Pres­i­dent Duterte said there is no need for the im­porters to wait for the new law as long as they pay the tar­iffs.

We will now watch the mar­kets to see whether the an­nounce­ment of “free-for-all” rice im­por­ta­tions will have the de­sired ef­fect of stop­ping the ris­ing in­fla­tion rate which had al­ready reached 6.7 per­cent last Septem­ber.

There was more bad news from abroad last week. World oil prices con­tin­ued to rise as Iran faced re­stric­tions on its oil ex­ports with the United States with­drawal from Iran’s agree­ment with Western na­tions. As a re­sult, oil firms in the Philip­pines raised their prices anew, with diesel up by an­other P1.45 per liter last Mon­day. The higher fuel price will be re­flected in even higher food mar­ket prices, since it now costs more to trans­port food prod­ucts from the farms to city mar­kets.

The de­ci­sion to al­low unim­peded rice im­por­ta­tion is the first im­por­tant govern­ment move to stop ris­ing in­fla­tion. Other moves have been pro­posed by var­i­ous quar­ters, in­clud­ing sus­pen­sion of the 2 per­cent TRAIN ex­cise tax on diesel which started in Jan­uary. There is also a pro­posal to sus­pend the Value-Added Tax (VAT) which has been in place for years.

For now, we await the ef­fects of the new pol­icy of unim­peded rice im­ports. We hope it will help stop the un­abated rise in prices in these fi­nal weeks of the year which also hap­pen to be our tra­di­tion­ally blessed Christ­mas sea­son.

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