Majority of Filipino families will likely benefit from lower retail prices of rice once a tariff-setting law is amended.
The Agricultural Tariffication Act of 1996, which sets the the country’s rice import quota, is expected to be amended this year. This will remove the limit on the volume of rice imports.
According to the National Economic and Development Authority (Neda), the price reduction in rice can go as much as P4.31 per kilogram if the amendment is passed. This will enable a Filipino household of five to save as much as P2,362 per year, Neda said.
Socioeconomic Planning Secretary Ernesto Pernia said the savings would be equivalent to about 13 percent of a household’s average rice expenditure of P17,921 as indicated in the 2015 Family Income and Expenditure Survey by the Philippine Statistics Authority.
“About 93 percent of Filipino households are rice consumers and they stand to benefit from lower price of rice,” Pernia said. “The amount of savings they can get could mean a lot to ordinary Filipinos especially to those struggling to make ends meet.”
Amendments to the law will pave the way for the lifting of the quantitative restrictions (QR) on rice and the imposition of a 35-percent tariff on imports coming from Asean member-countries like Thailand and Vietnam.
The removal of the QR is also expected to ease the impact of the new tax reform package, which has inflated prices of commodities.
Based on Neda’s preliminary estimate, the policy shift can reduce the country’s headline inflation rate by 1 percentage point. This measures the total inflation of the country including commodities such as food and energy prices.