Majority of households to benefit from removal of QR on rice imports
National Economic and Development Authority (NEDA) said the majority of Filipino families will benefit from lower retail prices of rice, which is the likely result once the amendment of the agricultural tariffication law is enacted.
Amending Republic Act (RA) No. 8178, otherwise known as the Agricultural Tariffication Act of 1996, is expected to ease the temporary inflationary impact of the newly implemented tax reform law, besides world oil prices, as well as increase savings of a Filipino household.
“About 93 percent of Filipino households are rice consumers and they stand to benefit from lower price of rice. It is high time that the bill amending the two-decade-old law is passed,” Socioeconomic Planning Secretary Ernesto M. Pernia said.
According to NEDA’s preliminary estimate, headline inflation rate would be reduced by 1 percentage point if the domestic wholesale rice market reduces its price to the level of imported rice. Even with just a P1.00 per kilo reduction in the wholesale price of rice, headline inflation rate would also be reduced by 0.3 percentage points.
At 35 percent tariff rate, the landed cost of imported rice, particularly from Thailand and Vietnam, along with its transport cost to the local market would be around P30.30 per kilogram. This is about P4.31 lower than the domestic wholesale price of regular milled rice.
The price reduction of P4.31 per kilogram will enable a Filipino household of five to save as much as P2,362 per year.
“This amount of savings could mean a lot to ordinary Filipinos especially to those struggling to make ends meet,” Pernia said.
Pernia explained that this amount of savings is equivalent to about 13 percent of a household’s average rice expenditure of P17,921 as indicated in the 2015 Family Income and Expenditure Survey.
The passage of the bill amending RA 8178 will pave the way for the lifting of the quantitative restriction on rice imports and the imposition of 35 percent tariff on rice coming from member-countries of the Association of Southeast Asian Nations (ASEAN) like Thailand and Vietnam.
Since the Philippines became a member of the World Trade Organization (WTO) in 1995, it had secured a waiver to extend the imposition of QR on rice imports several times to allow local farmers to prepare for competition.