MANILA, Philippines — Amid industry stakeholders’ apprehensions about an upcoming executive order, the Department of Agriculture (DA) is proposing a periodic review of tariffs on agricultural products, rather than keeping fixed rates until 2028.
“In our discussions with industry representatives, the suggestions ranged from reviewing the tariff every six months to one year, or even every four months,” Agriculture Secretary Francisco Tiu Laurel Jr. said on the sidelines of the World Trade Center Metro Manila’s event in Pasay City.
The DA said industry stakeholders were concerned that the proposed tariff reductions would not lead to a significant decrease in the retail prices of rice, a staple food in the Philippines.
The DA also admitted that the current plan “could adversely affect” the livelihood of local farmers as traders may buy palay at lower prices.
“Moreover, the reduction in tariff revenues could impede funding allocated for programs aimed at modernizing and mechanizing the rice industry, thereby jeopardizing efforts to enhance its competitiveness,” it added.
‘Balanced approach’
Tiu Laurel said the Cabinet must consider a “balanced approach” when dealing with both consumer welfare and the viability of the agriculture sector. Members of the Cabinet have yet to schedule a meeting to discuss a fiat aimed at cutting import duties on rice to 15 percent from the current 35 percent, effective until 2028 or until the end of the Marcos administration’s term.
Early this month, National Economic and Development Authority (Neda) Secretary Arsenio Balisacan announced the approval of the new Comprehensive Tariff Program aimed at keeping food prices low. The plan, which the President has already agreed to as Neda board chief, also covers various agricultural and industrial products.
READ: Marcos approves cut in rice tariff to 15%
Balisacan had said the tariff cut on corn, pork, and mechanically deboned meat would “ensure a stable supply of these commodities, help manage inflation, promote policy stability and investment planning and enhance food security.”
Inflation rose to 3.9 percent in May, almost hitting the upper end of the government’s target of 2 percent to 4 percent. While still within expectations, it quickened further from the previous month’s 3.8 percent.
Food inflation at the national level, however, slowed down to 6.1 percent, with rice slightly easing to 23 percent during the reference period.
READ: Salceda reminds gov’t anew: Rice is key to battling inflation
Industry stakeholders had said the assumption that rice prices would remain high until 2028 may not hold true if global market dynamics change.
They said global prices could drop if, for instance, India lifts the ban on exporting non-basmati rice and production rebounds after the El Niño phenomenon.
Based on official monitoring, local regular milled rice is currently being sold for P45 to P52 per kilogram, higher than P34 to P42 per kg in the same period last year. Locally produced well-milled rice costs P48 to P55 per kg, also lower than P38 to P46 per kg previously.