Safeguard duty on rice imports to add 0.2% to inflation —NEDA
The plan to impose safeguard duties on rice imports to shield farmers from the impact of enhanced competition amid a liberalized trade regime was thumbed down due to its inflationary impact.
In a press conference in Taguig City, National Economic and Development Authority (NEDA) chief and Socioeconomic Planning Secretary Ernesto Pernia said imposing safeguard duty on the imported staple would add 0.2% to inflation.
NEDA Undersecretary Rosemarie Edillion noted its “very direct effect” will be “20 basis points to inflation.”
Last week, Agriculture Secretary William Dar said the Cabinet did not endorse safeguard duties on imported rice because of inflationary concerns, but instead will give affected farmers a one-time P5,000 cash gift.
An estimated 600,000 rice farmers will receive the cash assistance in December.
The Rice Tariffication Law removed quantitative restrictions on rice imports and imposed a 35% tariff on imports from Southeast Asia.
The unimpeded importation of rice has brought down farmgates price of palay to as low as P7 per kilo after the Rice Tariffication law was implemented earlier this year, prompting farmers to seek government intervention.
The law mandated the creation of a Rice Competitive Enhancement Fund (RCEF) to help farmers face the unrestricted flow of imported rice into the country.
The P10-billion RCEF includes P5 billion for farm mechanization, and P3 billion to buy seedlings.
Dar earlier said the financial assistance of P5,000 per small farmer who till less than one hectare will be sourced from excess tariff collected from rice imports.
“We are seeing the RCEF collection to be greater than P10 billion. It will probably hit P13 billion so the P3 billion will be given to rice farmers,” Pernia said.
The NEDA chief said safeguard duties will not be discussed for at least a year. —VDS, GMA News