Neda chief, BSP exec: No to added tax on rice imports | Inquirer Business

Neda chief, BSP exec: No to added tax on rice imports

By: - Reporter / @bendeveraINQ
/ 05:40 PM October 22, 2019

Ahead of economic managers’ meeting on relief for farmers hurt by the lifting of volume limits on rice importation, the country’s chief economist and a Monetary Board official on Tuesday, Oct. 22, expressed opposition to adding taxes on foreign rice to protect the local industry from a surge in imports.

After confirming to the Inquirer that the Economic Development Cluster (EDC) will meet on Wednesday, Oct. 23, Socioeconomic Planning Secretary Ernesto M. Pernia said in a text message: “I actually told [Agriculture Secretary William] Dar it’s uncalled for, especially this soon.”

He was referring to the Department of Agriculture’s (DA) earlier plan to impose additional tariff on rice imports as local palay prices continue to fall, hurting farmers’ earnings.


Separately, Monetary Board member V. Bruce J. Tolentino told reporters that “any kind of additional tariff will kick prices up and add to inflation.” The BSP, he said, was unlikely to support any additional tariff on imported rice.


At 35 percent, the prevailing import duty under the Rice Tariffication law or Republic Act (RA) No. 11203 that took effect in March was already enough, Tolentino said on the sidelines of the Bankers Institute of the Philippines Inc.’s (Baiphil) general membership meeting.

The law was rushed in response to record inflation in 2018 blamed largely on rising prices of rice as a result of supply bottlenecks.

Dar earlier said that the DA had deferred the previous plan to push through with rice safeguard duty as the agency will first “actively” discuss any such measure with the EDC.

In a presentation, Tolentino said retail prices of rice in the Philippines were two to three times higher than in neighboring Thailand and Vietnam. Also, farm-gate prices of palay, or unhusked rice, were the same as retail rice prices in the two countries, he said.

“We have big problems in farm productivity. We must help farmers bring production costs down, and make food prices competitive,” he said.

Tolentino, who had been deputy director-general at the Los Baños, Laguna-based International Rice Research Institute (Irri), said the popular belief that the Philippines had mostly been self-sufficient in rice in the past was a “myth.”


“The Philippines has always been a rice importer. We were only self-sufficient in 1979—prior to that and after that [year] we’re a net rice importer,” he said.

With the rice trade “cartel” of the state-run National Food Authority (NFA) removed under the Rice Tariffication law, Tolentino said rice prices were expected to continue posting “significant” declines and help keep inflation at bay as cheaper imports come in and bring local prices down.

“We should take advantage of cheaper prices in Thailand and Vietnam,” he said.

He said rice imports to date already reached 1.8 million metric tons and could reach up to 2 million MT by yearend, up from the usual 1.5 million MT when the NFA monopoly and import quotas were still in place.

Tolentino, though, acknowledged the impact of rice imports on local farmers and said this was precisely the reason the Cabinet was discussing ways to find help.

Since volume limits were removed in March, the government had already collected P15 billion in taxes. At least P10 billion of this should be for the Rice Competitiveness Enhancement Fund which was supposed to be the source of cash aid to farmers, Tolentino said.

He said farmers may be given cash aid for a year while being trained to shift to high-value crops with strong demand. A “farm-to-table” fad makes fruits, vegetables, organic rice and livestock raised without chemicals highly valuable, he said.

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Congress would also need to act swiftly on pending measures that would free up funds to help farmers hurt by importation, according to Tolentino./TSB

TAGS: central bank, duties, farmers, importation, NEDA, rice, tariffs

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