DA: Lower tariffs to slash rice prices by P5

MANILA, Philippines —  Rice prices could go down by as much as P5 per kilo if tariffs on rice imports would be further reduced, according to government estimates.

Reducing the rice tariffs below 35 percent would result in retail prices of the staple decreasing by P4 to P5 per kilo, Agriculture Assistant Secretary and spokesman Arnel de Mesa said.

Finance Undersecretary Domini Velasquez said the government is looking at further reducing rice tariffs to around 15 to 20 percent compared to the already lowered present rate of 35 percent.

“If we are going to lower the tariffs to 17.5 percent, there would be a huge reduction (in retail prices of rice). Our estimate is about P4 to P5 (per kilo) reduction,” De Mesa said at a forum yesterday.

De Mesa was referring to the tariff rate earlier floated by Finance Secretary Ralph Recto. Earlier this week, Recto disclosed that the government wants to cut rice tariffs further to pull down retail prices of the staple faster.

The government already extended the lower tariff rates of 35 percent on rice imports until the end of the year as part of its counter-inflation measures.

The Department of Finance is willing to forego the estimated revenue losses of “less than P10 billion” arising from the rice tariff reduction in exchange for slowing down the country’s inflation, Velasquez pointed out.

“(The foregone revenues) would not matter much if we are able to bring down the prices (of rice by) P4 to P5,” she said.

De Mesa, meanwhile, said prevailing farmgate prices of palay would not be impacted much by the tariff reduction because of the higher buying price being offered by the National Food Authority (NFA).

Rice imports account for about 20 percent of the country’s total staple supply.

Rice inflation softened to 23.9 percent inflation in April from 24.4 percent in March, based on PSA data.

Raul Montemayor of the Federation of Free Farmers said reducing rice tariffs further could be “ill timed” since the rice competitiveness enhancement fund (RCEF), which depends on tariff collections, is being amended and improved.

Lawmakers and officials are keen on raising the guaranteed earmark budget of RCEF to P15 billion from the present P10