Just eight months into the implementation of the rice tariffication law, President Rodrigo R. Duterte said he ordered the suspension of importations to protect Filipino farmers reeling from low farmgate prices of palay (unhusked rice).
In a late night interview with the media at the Malacañang on November 19, 2019, Duterte also directed Congress and Agriculture Secretary William D. Dar to allot P3 billion for the purchase of locally grown rice and fill up government warehouses.
“Yes (I ordered the suspension), because it’s harvest time,” he said.
At the same time, however, he said that local rice production might not be enough. He also said he could not stop tariffication and that imported rice will be used as buffer stock.
“Kulang ang supply, too much demand. Mamili ka, magutom ang tao or magalit ang farmers. Problema you can’t depend on the producers. You cannot predict harvest because of climate change. It (crops) might be destroyed by a storm. Bilhin lahat ng produce ng mga farmers, fill up warehouses,” he said.
(Supply is inadequate, there’s too much demand. You choose - people will go hungry or the farmers will get angry. The problem is you can’t depend on the producers. You cannot predict harvest because of climate change. It (crops) might be destroyed by a storm. Buy the entire harvest of farmers, fill up warehouses.)
His conflicting statement caused confusion and a couple of days later, Dar announced that after seeking clarification from the President, importations will continue but with more stringent requirements.
Under the Rice Tariffication Act, or Republic Act (RA) No. 11203, rice traders may import rice without having to secure a permit from the National Food Authority (NFA), but they would have to pay the appropriate tariff to the Bureau of Customs - 35% for rice coming from the Association of Southeast Asian Nations (ASEAN) and 50% for rice from non-ASEAN countries.
Rice traders would also have to secure a sanitary and phytosanitary import clearance from the Bureau of Plant Industry.
The NFA, meanwhile, will focus on ensuring sufficient buffer stocks. The agency will still sell cheap rice, but may focus on areas that private traders do not serve.
Duterte signed the new law in February with the aim of bringing down prices of rice and, subsequently, inflation.
Since the implementation of this new law in March 2019, rice imports have reached 1.3 million tons as of end-August 2019, according to the Bureau of Plant Industry (BPI).
The data also showed that 3,115 Sanitary and Phytosanitary-Import Permits (SPS-ICs) of around 228 eligible rice importers were processed during the same period from March 5 to August 30, 2019.
Finance Secretary Carlos G. Dominguez III said the price of rice has decreased by more than P8 per kilo, well within the economic team’s estimate of a P7 to P10 drop.
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Farmgate prices also dropped to P15.71 per kilo from the third week of September to the second week of October, from an average of P17.23 per kilo in 2015 to 2017.
Citing Philippine Statistics Authority data, Dominguez said “in some provinces, farmgate prices fell by as much as P5.63 per kilo while in others, palay prices actually rose by P3.75 per kilo.” (Ventures Cebu)