Duterte admin to amend law mandating rice import quota to lift QR

The administration of President Rodrigo Duterte will move to amend a decade-old law that put in place the rice import quota in line with economic managers’ decision to scrap the quantitative restriction (QR) for good next year.

“During the economic sub-cluster meeting held at Malacañang last 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 (RA) 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 on 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 added.

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

Neda Director Reynaldo R. Cancio told an investor conference call last week that repealing the QR on rice will form part of a “strategic” trade policy to be pursued by the Duterte administration aimed at bringing down food prices.

In 2014, the World Trade Organization (WTO) allowed the Philippines to extend its QR on rice until June 30, 2017, in a bid to buy more time for local farmers to prepare for free trade in light of the government’s goal of achieving rice self-sufficiency.

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 to the government, whereas the market forces are being limited by the quota system.

Pundits say importation should be done by the private sector in order to allow market forces to determine prices.

The extended QR slaps 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 50 percent.

The Philippines’ most favored nation (MFN) rate—the additional tariff imposed when imported outside of Asean—on the commodity remains at about 40 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 again being renewed in 2014.