Optimism on the rise: Rice tariffication to curb inflation

CEBU, Philippines —  With the looming passage of the Rice Tariffication Bill, optimism rises that inflation will further stabilize this year as the measure is seen critical in bringing down prices of the Filipino staple.

And if more rice are flooded into the market, it will significantly lower inflation, said Philippine Retailers Association-Cebu president Robert Go.

Filipinos had been grappling with surging prices of basic goods last year due to supply woes, a new tax law, rising oil prices, among others.

“Inflation will be lower due to lower oil prices and expectations that rice will be abundant,” the Cebuano businessman pointed out.

Go noted believes that inflation will soon go back to the central bank’s target range of 2-4% in the near term.

Earlier, the National Economic and Development Authority said the immediate enactment into law of the Rice Tariffication Bill is key to stabilize food prices and overall inflation rate.

Economic Planning Secretary Ernesto Pernia said that with rice tariffication, affordable rice can be obtained from various sources and need not be the sole responsibility of the National Food Authority (NFA).

The rice tariffication bill amends the two-decade-old Republic Act 8178, otherwise known as the Agricultural Tariffication Act of 1996, and replaces the quantitative restrictions (QR) on rice imports with tariff.

The bill, which was ratified by both chambers of Congress on November 28, 2018, is set to be transmitted to Malacañang for the President’s signature.

“The aim of the bill is to make rice accessible and affordable to every Filipino, and to make the rice sector competitive,” Pernia had said in a statement.

Under the new rice importation regime, legitimate rice traders can now import rice sans NFA permits, provided they secure a sanitary and phytosanitary import clearance from the Department of Agriculture-Bureau of Plant Industry (DA-BPI) and pay the appropriate tariff to the Bureau of Customs.

The NFA, on the other hand, will focus on ensuring sufficient buffer stocks to address emergency situations. As there is a need to periodically replenish the buffer stocks, NFA can still sell cheap rice, but to very targeted markets.

“In selling rice, the NFA may opt to focus on far-flung areas, which some private traders may not find profitable to serve,” Pernia said.

The rice tariffication bill also provides safety nets to the rice sector as it grants the President emergency power to increase, reduce, or adjust existing tariff rates to safeguard Filipino farmers. The bill also provides the imposition of a special safeguard duty on rice in case of extreme or sudden price fluctuations in accordance with RA 8800 or the Safeguard Measures Act.

In the event of possible rice shortage, the bill empowers the President, for a limited period and for a specified volume, to allow importation at lower rates for the benefit of consumers.

Pernia said the government must ensure that rice traders are ready to participate when the bill is enacted into law.

“Increasing the number of market players and competition in the rice sector are critical for the bill to deliver on its promise of lower rice prices for everyone,” Pernia said.