It will be up to the next administration to pursue the removal of the quota on rice importation and gradually reduce the tariff on the commodity, Socioeconomic Planning Secretary Arsenio M. Balisacan said on Friday.
Noting that a repeal of Republic Act (RA) No. 8178 or the Agricultural Tariffication Act of 1996, which had kept the quantitative restriction (QR) on rice importation, may no longer happen during this administration, Balisacan said the challenge to do so will be passed on to the next administration.
The World Trade Organization (WTO) last year allowed the Philippines to extend its QR on rice until 2017, in a bid to buy more time for local farmers to prepare for free trade in light of the government’s goal of achieving rice self-sufficiency.
“We can take the period up to 2017 to prepare farmers and legislators in advocating for the reform from QR to tariffication,” Balisacan said during the policy forum and research symposium dubbed “Climate Change in the Philippines: Scenarios, Policies, and Investments in Agriculture.”
Balisacan, who is also the Director General of the National Economic and Development Authority (Neda), later told a press conference that in case the QR on rice will be eventually scrapped, slapping an import duty of 30-35 percent would be “a much better regime than QR.”
“We can commit to reduce the tariff over time; it can be negotiated with [trading partners],” the Neda chief said.
The WTO refers to tarrification as the “procedures relating to the agricultural market-access provision in which all non-tariff measures are converted into tariffs.”
“Tarrifying” the restriction will make the rice market more predictable, transparent and more market-friendly while still protecting farmers, he said.
Balisacan is pushing for the removal of the quota system, noting the QR puts the burden of rice demand and supply on the government, while limiting market forces.
The Neda chief had partly blamed high rice prices, partly due to the prevailing QR regime, for the higher poverty incidence registered in the first half of last year. The commodity accounts for a fifth of low income families’ budgets.
Since the government imposes a quota on rice imports, domestic prices are vulnerable to shocks resulting from meager supply.
The extended QR slaps a 35-percent duty on imported rice under a minimum access volume (MAV) of 805,200 metric tons. Importation outside of the MAV limit are levied a higher tariff of 50 percent.
The Philippines’ most favored nation or MFN rate—the additional tariff imposed when imported outside of Asean—on the commodity remains at about 40 percent.