IRR for rice tariffication law out; cheaper rice prices seen

MANILA, Philippines — Rice prices are expected to be cheaper by up to P7 per kilo with the release of the implementing rules and regulations (IRR) for the law easing importation to guide trade of the Filipino staple food.

The IRR of Republic Act No. 11203 or the rice tariffication law was contained in the 31-page Joint Memorandum Circular 01-2019 signed by Agriculture Secretary Emmanuel F. Piñol, Socioeconomic Planning Secretary Ernesto M. Pernia, and Acting Budget Secretary Janet B. Abuel.

The IRR will take effect 15 days upon publication.

But RA 11203 already took effect last March 5, under which its self-executing provisions, including the following tariff rates, now apply: 35 percent if rice was imported from within Asean; 40 percent if within the minimum access volume (MAV) of 350,000 metric tons for imports coming from countries outside Asean; and 180 percent if above the MAV and from a non-Asean country.

Previously, rice had an import quota dubbed “quantitative restrictions” (QR) aimed at protecting local farmers.

The QR had put the burden of rice supply and demand to the government, while market forces were limited by the quota system.

But economic managers had deemed that private sector-led importation will allow market forces to determine prices and bring them down.

When the government imposed a quota on rice imports, domestic prices were vulnerable to shocks resulting from meager supply, as what happened last year when stocks got depleted, contributing to the 10-year high inflation of 5.2 percent in 2018.

With the removal of the rice QR, the government projected a 0.6-percentage point cut in the headline inflation rate this year.

“We celebrate this milestone for the agriculture sector. All concerned agencies, including the National Economic and Development Authority, are duty bound to implement this historic law. In moving forward, we all have the long-term goal of modernizing the rice industry and improving the lives of all Filipinos, especially farmers, in our minds,” Pernia, who heads the state planning agency Neda, said in a statement Friday.

Among the key provisions of RA 11203’s IRR included the power of the President to enforce safeguard measures when rice prices steeply fluctuate.

The rice tariffication law also took away the commercial functions and regulatory powers of the National Food Authority (NFA), only retaining its emergency buffer stocking mandate, which were threshed out in the IRR.

As such, the grains agency will undergo reorganization under provisions in the implementing guidelines.

Under the IRR, “the NFA Council chaired by Piñol will likewise commission a study that will determine the NFA’s optimal buffer stock for emergency and relief purposes,” Neda said.

According to Neda, “prior to the completion of the study, the NFA will continue to maintain its current buffer stock level ranging from 15 to 30 days based on a daily national rice consumption of 32,593 metric tons per day.”

“The unused grain rice stocks will be unloaded and sold in the domestic market at the prevailing market price or even at a slightly lower rate as long as this would cover storage logistics costs,” according to Neda.

Since the government would collect P7-11 billion in tariffs during RA 11203’s first year of implementation, the IRR threshed out how to establish the P10-billion Rice Competitiveness Enhancement Fund (RCEF) coming from the national budget, which will be directly transferred to implementing agencies.

Also, the IRR “sets the guidelines on the allocation of the tariff revenues in excess of P10 billion,” which Neda said “will be tapped to provide direct financial assistance to rice farmers adversely affected by the new rice import regime.”

The IRR also removed the prior documentary requirements of the Bureau of Customs and the Bureau of Plant Industry (BPI) for rice imports, which had included the NFA permit, license, or registration for trade and importation of rice.

“The only requirement to import and trade rice is the phytosanitary import clearance (SPSIC), which can be obtained from the BPI,” Neda said.