The Duterte administration plans to remove the Philippines’ quota on rice importation, a move seen to help lower the prices of a staple food among Filipinos.
“Just last week, the Cabinet has decided to end the quantitative restriction (QR) on rice,” National Economic and Development Authority (Neda) Director Reynaldo R. Cancio told an investor conference call late Thursday.
Cancio said repealing the QR on rice would form part of a “strategic” trade policy to be pursued by the Duterte administration aimed at bringing down food prices.
“The dismal performance of agriculture needs urgent attention. To reverse the output decline in the agriculture sector, a comprehensive agricultural development program will be pursued. This includes better land administration, asset reform, improving access to technology and innovation, and moving up the value chain,” Cancio said.
A repeal of Republic Act (RA) No. 8178 or the Agricultural Tariffication Act of 1996, which had kept the QR on rice imports in place, should be pursued to scrap the quota, he said.
But contrary to Cancio’s pronouncement, Agriculture Secretary Emmanuel F. Piñol said in a text message that the removal of the QR system was a matter that “has not been decided yet.”
Asked if he would push to scrap the QR, Piñol replied: “I won’t, but I don’t know about the others [other economic managers].”
In 2014, the World Trade Organization (WTO) 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.
Since the government imposes a quota on rice imports, domestic prices are vulnerable to shocks resulting from meager supply.
The QR puts the burden of rice supply and demand on the government as market forces are being limited by the quota system. 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 (MFN) rate—the additional tariff imposed when imported outside of Asean—on the commodity remains at about 40 percent.