WASHINGTON, D.C., U.S. — In response to inflationary pressure, the Philippine government is planning to liberalize rice imports by converting quantitative restrictions to tariffs.
Such a move would help reduce inflation and lower rice prices by P2 to P7 (13 centers) per kilo, according to a report from the U.S. Department of Agriculture’s Foreign Agricultural Service (FAS).
Both the House and Senate have passed legislation that would convert the restrictions to tariffs and President Rodrigo Duterte is expected to sign it into law before the end of 2018.
The current rice import tariffs rates are 35% for in-quota volumes while out-quota tariffs are 50%.
Highlights of the of the consolidated bill include:
· The Minimum Access Volume (MAV) will revert to its 2012 level of 350,000 tonnes from the current 805,200 tonnes.
· In-quota Most Favored Nation (MFN) rates will remain at 35%.
· The MFN tariff for out-quota imports is raised from 50% to 180%.
· In- and out-quota imports from ASEAN countries will be levied a uniform 35% duty.
· A Rice Competitiveness Enhancement Fund will be created consisting of an annual P10 billion ($192.3 million) appropriation through the next six years.
· A special rice safeguard duty shall be imposed for the industry’s protection from extreme or sudden price fluctuations.
· The NFA’s role is confined to local paddy procurement and buffer-stocks management.
No immediate changes to 2018-19 imports are expected if, and when, the rice tariffication bill is enacted into law, as ample shipments already have been booked, the FAS said. It is, however, expected to encourage more imports from ASEAN countries, and less from non-ASEAN sources. The potential for import growth in the medium to long term will depend mainly on the performance of Philippine domestic production.