Gov’t to remove rice import quota next year

THE COUNTRY’S economic managers are in favor of removing  import restrictions on rice next year in line with the Philippines’ commitments under the World Trade Organization (WTO), according to the  Office of the Cabinet Secretary.

The WTO allowed the Philippines in 2014 to extend its quantitative restrictions (QR) on rice until June 30, 2017, in a bid to buy more time for local farmers to prepare for free trade.

“During the economic subcluster meeting held at Malacañang on Aug. 24, the cluster members agreed to allow the lifting of the QR. However, this does not mean an open market domestically, considering the existence of Republic Act No. 8178, otherwise known as the Agricultural Tariffication Act” of 1996, the Office of the Cabinet Secretary said in a statement sent to the Inquirer Friday night.

“As explained by the Department of Agriculture in the technical working group meeting last Sept. 1, RA 8178 has to be amended to meet and comply with the lifting of the QR. Thus, it is recommended to revisit RA 8178 and amend the same accordingly to provide a harmonized direction on rice importation in the country,” it said.

Lower food prices

The National Economic and Development Authority (Neda) earlier disclosed the decision of the economic managers to remove the Philippines’ quota on rice importation, as the government moves to lower the price of the Filipinos’ staple food.

Neda Director Reynaldo R. Cancio told an investors conference call last week that repealing the QR on rice would form part of a “strategic” trade policy to bring down food prices.

Since the government imposes a quota on rice imports, domestic prices are vulnerable to shocks resulting from meager supply.

The QR puts the burden of rice supply and demand on the government, whereas the market forces are  limited by the quota system.

The extended QR slaps a 35-percent duty on imported rice under a minimum access volume (MAV) of 805,200 metric tons. Importation outside of the MAV limit are levied a higher tariff of 40 or 50 percent.

In 1995, the WTO allowed the Philippines to impose a 10-year quota system for rice importation. The QR was extended in 2004, and then lapsed in 2012, before it was again renewed in 2014.