Salceda: Tariff reduction to slash P6 per kilo of rice, won’t hurt gov’t program

MANILA, Philippines — A proposal to reduce the import tariffs on rice is estimated to bring down imported grain prices by P6 per kilogram without harming the Rice Competitiveness Enhancement Program (RCEP), Albay 2nd District Rep. Joey Salceda said on Monday.

Salceda said in a statement that they have estimated that this move, aimed at bringing down prices of rice further, would be feasible since the RCEP has met its P10 billion target of tariff revenues required to fund the program.

Presently, the country is imposing a 35 percent rice import tariff rate, which the Department of Finance (DOF) seeks to reduce temporarily to zero or at least 10 percent.

“With three weeks left before Congress adjourns, this decision is best left to the President and his power to adjust tariff rates when Congress is not in session. Obviously, it will be a temporary modification. But it is a viable solution for present rice price issues. In general, I am supportive of ensuring that we have all the options necessary to meet our local demand and reduce the consumer price of rice,” Salceda said.

“We estimate that the price of imported rice could go down by as much as P6 per kilo as a result of a tariff reduction from 35% to 10%. It will also not compromise the implementation of the Rice Competitiveness Enhancement Program since the P10 billion in tariff revenues required to fund them has already been met by this year’s tariff collections,” he added.

Salceda, an economist, also suggested that the National Food Authority (NFA) should aggressively buy palay from local sources so that the higher importation rates brought about by the lower tariffs would not force local farmgate prices down.

“I also strongly suggest that the rice tariff reduction should be accompanied by more aggressive palay buying operations by the NFA, to ensure that the surge in imports does not unduly depress farmgate prices. The Rice Tariffication Law allows the NFA to source palay locally,” the lawmaker said.

Due to the sharp rise in prices of grains, Finance Secretary Benjamin Diokno said that the government needs to adopt a comprehensive approach to ensure that prices remain stable.

This was despite President Ferdinand Marcos Jr. issuing Executive Order No. 39 last August 31, which imposed a price ceiling of P41 per kilogram of regular-milled rice and P45 per kilogram of well-milled rice.

READ: DOF urges tariff-free rice imports to ease prices

The proposal was met with concerns from other lawmakers, like Senator Imee Marcos who said that her father, former president Ferdinand Marcos Sr., would rise from the grave and declare martial law due to the state of the local rice industry.

Senator Marcos sarcastically said the country should stop planting and just rely on importations instead.

READ: Imee: My dad will rise and declare martial law because of these rice issues

Salceda on the other hand said the best solution is still to produce more rice from local farmlands, which he said the Marcos administration has tried.

“The long-term and sustainable solution is still to produce more rice domestically, in a way that is resilient to climate risks. Actually, the PBBM administration has achieved a 3% growth in palay harvest for 2023. We are poised for a bumper crop year this year,” Salceda said.

“We need to reduce our dependency on rice imports to protect us from rice trade volatility. That is the direction of this administration,” he added.

Due to the price of rice grains rising sharply, President Marcos crafted E.O. No. 39, imposing a ceiling on prices.  According to the Presidential Communications Office, E.O. No. 39 was signed to counter the following factors:

• Illegal price manipulations like hoarding and industry collusion
• Global events outside the country’s control, such as the Russia-Ukraine conflict
• India’s rice export ban
• Capricious oil prices in the international market