Marcos disapproves temporary reduction of rice tariffs

President Ferdinand "Bongbong" Marcos Jr. on Tuesday disapproved the proposal to temporarily reduce rice tariffs to address the increase of rice prices in the market.

Marcos thus disclosed after the sectoral meeting on Tuesday in Malacañang where NEDA presented updates on the proposed rice tariff reduction with inputs from the Department of Finance (DOF), Department of Trade and Industry (DTI) and the Department of Budget and Management (DBM).  

“It was not the right time to lower the tariff rates because the projection of world rice prices is that it will go down," Marcos said.

"So, this is not the right time to lower tariffs. Tariffs are generally lowered when the price is going up,” he added.

Some farmer groups raised concern over some negative effects should rice tariff reduction be adopted such as that importers would mostly stand to gain with the proposal “because they are already undervaluing rice” and will only “further depress” palay prices and discourage farmers from expanding their future production.

The NEDA recommended earlier a reduction in the tariff imposed on imported rice in a bid to help lower local rice prices in the market.

The proposed tariff reduction was supposed to eventually lead to the lifting of Executive Order No. 39, which mandated price ceilings on regular and well-milled rice in the market.

At the meeting, Socio-economic Planning Secretary Arsenio Balisacan and Agriculture officials Undersecretaries Leocadio Sebastian and Mercedita Sombilla agreed that it was not the right time to lower tariff rates because of the downtrend of rice prices in the world market.

Under EO 39, which took effect on September 5, the mandated price ceiling on regular rice is at PhP41 per kilo while the mandated price cap on well-milled rice is at P45 per kilo.

As regards the lifting of the mandated price ceilings, Marcos said they would remain in effect pending further study.

Marcos has ordered the Department of Social Welfare and Development to provide P15,000 in cash assistance to small rice retailers affected by the implementation of the price ceilings.

The tariff cuts was one of several measures the Department of Finance proposed to stabilize the rising rice prices, a situation that compelled the government to implement an unprecedented price control on the staple.

Finance Secretary Benjamin Diokno said that the government needs to adopt a comprehensive approach to help ensure that rice supply remains sufficient at reduced prices.

With this, Diokno said the DOF has proposed "the reduction of the 35% rice import tariff rates, both ASEAN and MFN [most favored nation] rates, temporarily to 0% or maximum of 10% to arrest the surge in rice prices."

Pressed for details, the Finance chief said rice is the biggest contributor to inflation as he emphasized the need to propose a tariff reduction for rice imports.

Inflation, or the rate of increase in the prices of consumer goods and services, accelerated to 5.3% in August, faster than the 4.7% rate seen in July.

"Usually ang reduction is one year and puwede naman i-extend,” Diokno said, noting that the duration of the temporary cut on rice tariffs would be subject to a series of hearings.

The Finance chief added that the tariff cut could be implemented gradually, but also floated the possibility of an outright full rate reduction.

“May proposal na it should be gradual… e kung drastic ‘yung price increase, then pwede drastic yung [tariff cut]… d’i naman necessarily bad ang drastic,” he said. —NB, GMA Integrated News