Palace cuts rice tariffs to 15%

(UPDATES) MALACAÑANG has ordered tariff cuts for rice and other key commodities in an effort to keep prices low and inflation under control.

President Ferdinand Marcos Jr., through Executive Secretary Lucas Bersamin, on Thursday approved Executive Order (EO) 62 to formalize changes to the 2024-2028 tariff program.

Earlier this month, the National Economic and Development Authority Board chaired by Marcos announced that the «strategic» move would ensure access and affordability of essential goods and at the same time balance the interests of consumers and domestic producers.

Among others, the import duty on rice — blamed for rising inflation — was slashed from an already lowered 35 percent to 15 percent.

Reduced tariffs on corn, pork and mechanically deboned meat that were originally set to expire at the end of this year via EO 50 were also extended to 2028.

The reduced rice tariffs will take effect in 15 days from the June 20 publication of EO 62 while the rest of the approved revisions become enforceable in 30 days.

«There is a need for a new multiyear and comprehensive tariff schedule that will provide a transparent and predictable tariff structure, and allow businesses to engage in medium- to long-term planning to improve productivity and competitiveness, facilitate trade and enhance consumer welfare,» EO 62 states.

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«The implementation of an updated comprehensive tariff schedule aims to augment supply, manage prices and temper inflationary pressure of various commodities, consistent with the Philippine national interest and the objective of safeguarding the purchasing power of Filipinos,» it adds.

Analysts said the move could lower inflation significantly but warned of the long-term impact on farmers.

Security Bank Corp. chief economist Robert Dan Roces said that while estimates showed that inflation could drop by 0.4 to as much as 1.8 percentage points, this would depend on the extent and speed of adjustments in domestic rice prices.

Inflation, which picked up to 3.9 percent last month, could potentially hit 2.0 percent, HSBC Global Research economist Aris Dacanay said, at the bottom end of the central bank's 2.0- to 4.0-percent target.

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