PHL to operate under higher inflation without rice tariffication —Diokno

If both houses of Congress fail to pass the bill seeking to replace quantitative import restrictions on rice with tariffs, inflation will remain high, Budget Secretary Benjamin Diokno said Wednesday.

“If lawmakers fail to pass rice tariffication, we may be operating under a slightly higher inflation rate for 2019,” Diokno said during his weekly breakfast forum with reporters.

Rice contributes 0.7 percentage points to inflation, the Cabinet official said.

Economic managers target inflation to range between 2 to 4 percent.

But inflation has been skyrocketing this year, a situation that Duterte’s economic managers said is transitory due to excise taxes and higher prices of fuel. They expect inflation to slow down in the last quarter of 2018 and settle within the government’s target range in 2019.

Since rice contributes 0.7 percentage points to inflation, it will add that much to the target range next year if the rice tariffication bill is not approved. “But we’re confident that they will pass this year,” Diokno said.

“The House and Senate are under pressure to do these things in two weeks. I’m confident they will act on these important matters,” he said.

On August 14, the House of Representatives approved on third and final reading House Bill 7735, or the proposed “Revised Agricultural Tariffication Act.”

During his State of the Nation Address last July, President Rodrigo Duterte urged Congress to immediately pass the bill. 

With rice tariffication, the price of commercial rice is expected to go down by P4 to P7 per kilogram by the fourth quarter of the year, Diokno said, noting that its full impact on rice prices will be felt by 2019.—VDS, GMA News