‘Not going to happen’: Added tax on rice imports

There will be no added tax on foreign rice to protect local farmers from a flood of imports, the country’s chief economist said on Thursday, Oct. 24.

“That’s not going to happen,” said Socioeconomic Planning Secretary Enresto M. Pernia, referring to a plan by the Department of Agriculture (DA) to charge additional tariff on imported rice to protect Philippine farmers from falling prices as a result of abundant supply.

Pernia said the government was already preparing to distribute cash aid to farmers “most affected” by the lifting of volume limits on rice importation.

He said farmers qualified for the unconditional cash grant, however, are only those in provinces which suffered sharp declines in prices of palay, or unhusked rice.

Late on Wednesday, Oct. 23, Finance Secretary Carlos G. Dominguez III told reporters that while the DA brought up the plan to add tax on rice imports, the Economic Development Cluster did not discuss it.

Dominguez said he surmised that the DA “doesn’t have the confidence in pushing this idea.” “Maybe they don’t have all the numbers so we didn’t discuss it today,” he said.

He said decisions like whether to impose additional tariff on imported rice have to be “data-driven.” “I’m sure the DA is looking at the data so we’ll certainly listen to them if and when they bring it back,” said Dominguez of the DA proposal to collect additional tax on imported rice.

The EDC meeting, though, was about how to help local farmers cope with increasing imports and declining prices.

The DA, according to Dominguez, was still determining the most affected farmers and “how much” help they needed.

“Quite frankly, not everybody, not all farmers in the Philippines were affected in the same way,” said Dominguez.

He cited an unnamed province in Central Visayas “where the governor assured me that prices haven’t dropped in the area.”

Data from Mindanao showed “prices seem to be holding up there,” said Dominguez.

“But again, this is subject to further investigation,” he said.

Dominguez said funding for aid to farmers hurt by importation was no problem. “We will have the budget for it,” he said referring to the P10 billion to be set aside from tariffs on imported rice.

He said he suspected that “some traders have taken advantage of the supply situation—maybe that’s why palay prices are down.”

“That’s why we have to see how we can assist those farmers and, definitely, we are open to that idea,” Dominguez said.

Since rice import restrictions were removed last March, the government had already collected P15 billion.

Dominguez said the economic team was also working on a scheme to give beneficiaries of the Pantawid Pamilyang Pilipino Porgram, or 4PS, part of their aid in rice instead of cash.

He acknowledged, though, that giving rice instead of cash would bring a “logistics problem.” Economist Joey Salceda, now Albay representative, had said the simplest way to help those in dire need was to give them cash./TSB