GOV’T ASKED TO KEEP LOWER TARIFFS ON RICE

Advocacy group Foundation for Economic Freedom (FEF) is asking the government to extend indefinitely the imple- mentation of reduced tariffs on imported rice to stabilize the price of this staple Filipino food.

In its position paper, FEF said the nonextension of Executive Order (EO) No. 171 would increase tariff rates on rice products coming from countries outside the Association of Southeast Asian Nations (Asean) block, thereby jacking up local selling prices. EO 171 will lapse by end-December this year.

FEF noted that allowing EO 171 to lapse would lead to a 5 to 15 percentage point increase in tariff rates on non-Asean rice, “narrowing affordable options for consumers.”

“This is a risky move when the food inflation rate in 2022 has thus far hit very high levels of nearly 10 percent,” it added.

The group claims that the rationale behind the reduction of most favored nation (MFN) tariff rates for rice coming from non-Asean nations to 35 percent from 50 percent is “still valid.”

“The tariff reduction on non-Asean rice clearly amplifies the favorable impact of RLA (Rice Liberalization Act) on consumers,” it said, referring to Republic Act No. 11203, which liberalizes the importation, exportation and trading of rice as well as lifts the quantitative import restriction on this commodity.

Since its late 2018 with the enactment of EO 171, FEF said retail prices of rice, particularly well-milled and regular milled rice, has been on a declining trend.

It said although prices of locally produced regular milled rice had spiked at the height of the COVID-19 pandemic in early 2020, “prices mostly stabilized throughout the rest of 2020 and 2021.”

Despite the drop in market share of imports from non-Asean countries, FEF noted that the absolute quantity of imports from these countries had increased from 71,821 tons in 2020, to 85,996 tons in 2021.

“Cultivating new export supply networks takes time, whereas there has been a long history of Asean supply to the Philippines from Vietnam and Thailand, and even Cambodia and Myanmar,” it added.

FEF filed a petition at the Tariff Commission to extend the implementation of reduced tariffs on rice, corn and pork under EO 171.

Signed by former President Rodrigo Duterte, the tariff for pork imports was set at 15 percent for in-quota volume and 25 percent for out-quota volume.

For rice, the rates were set at 35 percent both for in-quota and out-quota imports, while for corn, the tariff stands at 5 percent for in-quota and 15 percent for out-quota.

Meanwhile, coal imports enjoy zero tariff until the end of 2023.