The Market Monitor Minding the Nation's Business
By Rose de la Cruz
Unable to defend the wisdom of reducing tariffs on imported rice, which failed to result in lower retail prices, the government is now reviewing whether to continue implementing EO 62 (on reduced tariffs) or to raise them in time for the coming harvest season for the main crop in April.
“To ensure our farmers are not significantly affected (by lower tariffs), this will be reviewed… Once the National Economic and Development Authority (NEDA) provides a detailed report, it will be forwarded to the Office of the Executive Secretary for submission to the President,”.
Palace Communications Undersecretary Clarissa Castro told reporters that EO 62 which took effect last July 2024 (on the hard push by the National Economic and Development Authority) lowering import duties on rice from 35 to 15 percent to tame inflation is now being studied by the NEDA every four months. The EO intended it to last until 2028.
Despite the implementation of lower tariffs, prices of rice have kept rising in local retail markets, despite continued declines in global rice prices.
DA’s price monitoring of Metro Manila markets as of March 22, said a kilogram of imported special rice was priced around P50-P60, slightly lower than the P57-P65 a year ago.
Local well-milled rice is now priced at P38-P54 per kilo versus P49-P58 a year ago. Regular milled rice is priced at P32-P49 per kilo versus P50 a year ago.
The Tariff Commission is scheduled to hold a public hearing on March 28 to tackle the Samahang Industriya ng Agrikultura’s (SINAG) petition seeking to revert the tariff to 35%.
SINAG Executive Director Jayson H. Cainglet said the Tariff Commission would likely raise tariffs due to admissions from agencies such as NEDA and the Bureau of Customs that rice prices remain high despite the lower tariffs.
“We cannot see how the Tariff Commission will decide otherwise,” he said. “And they should explain if they will decide otherwise, on what basis? What data will they use?”
Former DA Secretary William D. Dar said lower tariffs will help bring down prices of rice.
“While imported rice is more than enough, the problem remains having high rice prices in the market… The reason why tariffs were lowered was due to spiraling rice prices and I believe that lowering tariffs will contribute to lower rice prices,” he told Business World.
Dar said the government should also ramp up efforts against hoarding and price manipulation.
“The key problem now for the government to handle is the alleged hoarding and price manipulation,” Dar said. “Smuggling is another issue to be handled squarely.”
Former DA Undersecretary Fermin D. Adriano backed a review of the lower tariffs on rice.
“For as long as the decision is based on sound analysis such as considering the impact on producers, consumers and the economy and not on political consideration alone, (a review on rice tariffs) should be done,” he said.
Current DA Secretary Francisco Tiu-Laurel, Jr. said he will propose to the Office of the President raising the rice tariff as demanded by local farm groups if the retail price for rice drops to P42 to P45 per kilo.
Local farmers opposed the lower tariff during the harvest season since it will bring down their profit.