By NEDA PR/PNA
MANILA — The National Economic and Development Authority (NEDA) on Friday welcomed the passage of the rice tariffication bill in the bicameral conference committee, which said this bill — once signed into law and enforced — will solve food supply issues and improve the country’s agricultural productivity.
The two chambers of Congress have approved the passage of the rice tariffication bill, which amends Republic Act (RA) No. 8178, otherwise known as the Agricultural Tariffication Act of 1996. This will replace quantitative restrictions (QR) on rice imports with tariffs and remove unnecessary government intervention in the rice market.
“We view this as a positive development as the administration’s economic team exhausts all efforts to tame increases in the prices of goods. With only the President’s signature before rice tariffication becomes a law, we are making a big step in the realization of our agricultural reform agenda,” Socioeconomic Planning Secretary Ernesto M. Pernia said.
Pernia said the Bicam-approved bill addresses not only the tariffication of rice in compliance with the Philippines’ obligation to the World Trade Organization (WTO), but it also addresses food security by increasing the availability and accessibility of cheaper rice to the consuming population.
“The economic team has always been mindful that food remains to be the major contributor to inflation. Efforts to address food supply concerns, especially rice, will definitely help bring down consumer prices,” he added.
According to NEDA’s preliminary estimate, headline inflation rate would be reduced by 1 percentage point if rice prices will be reduced to the level of imported rice. Even with just a PHP1.00 per kilo reduction in the wholesale price of rice, headline inflation rate would also be reduced by 0.3 percentage points.
Rice tariffication also helps improve the productivity of farmers and, as a result, enables them to increase their incomes.
The bill provides for the establishment of a rice competitiveness enhancement fund (RCEF) from an annual appropriation of PHP 10 billion for the next 6 years.
If the tariff revenues exceed PHP10 billion in any given year, the excess revenue will still be plowed back to RCEF to support rice farmers.
“The RCEF will be used to provide key interventions to support our farmers and enhance their competitiveness, including farm machinery and equipment to improve farm mechanization, rice seed development, propagation and promotion, expanded rice credit, and extension services,” Pernia said.
A portion of the rice tariff revenues in excess of PHP10 billion shall also be used to provide direct financial assistance to rice farmers adversely affected by the removal of the quantitative restriction.