Thursday, June 20, 2024

NewsHorizon

Where your horizon expands every day.

Business

Marcos encouraged the continuation of a reduced tariff rate on rice.


Reported by Luisa Maria Jacinta C. Jocson

The IAC-IMO has proposed to continue the reduced tariff rate on rice until 2024, according to NEDA Secretary Arsenio M. Balisacan.

In a statement on Thursday, the IAC-IMO suggested extending the reduced Most Favored Nation tariff rate on rice until December 2024 in order to combat the rising cost of rice and guarantee sufficient supply through timely and adequate imports. However, this extension will be reviewed in July 2024.

The interagency committee, which is chaired by the NEDA Secretary, made the recommendation during a meeting on Oct. 3.

Mr. Balisacan made the statement after data showed September inflation quickened for a second straight month to 6.1% in September, mainly due to a surge in rice and transport costs.

The rate of inflation for rice increased by 17.9%, the highest it has been since March 2009, even though a price limit was placed on domestic rice in September.

Mr. Balisacan said that the committee’s proposal to extend the reduced tariff must be supported by “efforts to improve the predictability and transparency of issuing the Sanitary and Phytosanitary Import Clearance for rice and all commodities.”

Mr. Balisacan emphasized the importance of not only implementing short-term solutions to alleviate the impact of inflation, but also addressing long-term food supply concerns by offering assistance to local farmers in increasing their productivity and ability to withstand challenges. This assistance may include investments in irrigation, modern and efficient crop varieties, pest management, and logistical support.

Last December, President Ferdinand R. Marcos, Jr. approved Executive Order (EO) No. 10, which prolonged the reduced taxes on rice, pork, and corn until December 31, 2023.

The tariff rate for rice within the minimum access volume quota and for excess imports remains at 35% as stated in the order.

The NEDA’s statement on Thursday did not specify if the IAC-IMO’s suggestion encompassed prolonging the reduced tariff rates for pork and corn.

According to Mr. Balisacan, the suggestion to temporarily decrease rice tariffs may be reconsidered if there is a necessity to control prices.

The NEDA and Finance department suggested a temporary decrease in tariff for rice imports as a way to combat rising prices. However, Mr. Marcos rejected the proposal last week, stating that it was not the appropriate timing.

According to the Chief Economist of China Banking Corp., Domini S. Velasquez, extending EO No. 10 could possibly help reduce the rise in rice prices for the upcoming year.

“The directive, EO No. 10, should only serve as a temporary solution to address the issue of rising prices. In the future, it is crucial to increase efforts in enhancing the production capability of domestic farmers,” she conveyed in a message on Viber.

According to Raul Q. Montemayor, the national manager of the Federation of Free Farmers, importers did not pass on the savings from tariff reduction proportionally to consumers.

He stated that there has not been a significant decrease in the retail prices of the commodities, specifically pork, corn, and sugar.

According to Mr. Montemayor, the economic managers are using a scattered method, without clear knowledge of who will be advantaged or disadvantaged.

“Extending EO NO. 10 would not be logical without intentional tactics and a thorough assessment of the consequences of the reduced tariffs,” he stated.

The Department of Finance (DoF) has released a separate statement outlining their efforts to implement measures that combat “non-competitive market behavior, aid farmers, and safeguard those in vulnerable positions.”

The Department of Finance announced that the government is taking action against individuals and groups involved in smuggling, hoarding, and other activities that hinder fair competition in the market.

The Department of Finance stated that the government will continue to enhance and implement programs using the Rice Competitiveness Enhancement Fund. These programs include farm mechanization, seed development, promotion, credit assistance, and extension services. Their goal is to increase productivity among rice farmers, decrease production expenses, and connect local producers to the value chain.

The article also mentioned strategies like managing energy and water demands, implementing specific cash transfer initiatives, and providing subsidies and aid for fuel.