Rice tariffs to complement TRAIN’s social mitigation measures
The Department of Finance (DOF) said the government’s rollout of social mitigation measures need to complemented by enactment into laws of a national ID system and the lifting of restrictions on rice imports to further ease the impact of inflation on the country’s vulnerable sectors.
Finance Assistant Secretary Ma. Teresa Habitan said changing the way rice is imported by shifting from setting import quotas to just imposing tariffs on cheaper imports of the grain would help stabilize the supply of rice and lower its prices in the retail market.
A national ID system, meanwhile, will minimize leakages in implementing the Unconditional Cash Transfer program and other social welfare programs and will help ensure that the cash aid would reach the legitimate beneficiaries.
These twin measures, Habitan said, will help cancel out the minimal impact of the Tax Reform for Acceleration and Inclusion (TRAIN) Law on inflation and speed up the rollout of the social mitigation measures provided under this law.
Based on estimates by the Bangko Sentral ng Pilipinas (BSP), rice tariffication alone will immediately lower the inflation rate by 0.4 percentage points, “which already offsets TRAIN’s impact on prices,” Habitan said.
Up to 30 percent of the incremental revenues collected under TRAIN, which is the first package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP), has been earmarked for social protection programs to help vulnerable sectors cope with the minimal inflationary impact of this tax reform law.