NextGen Day

MANILA – Rice prices have dropped to an average of PHP39 per kilogram (kg) with the enactment and implementation of the Rice Tariffication Law (RTL) in 2019, a reduction of roughly PHP7 per kilogram compared to their high in 2018 when they peaked at around PHP46 per kilogram.

Rice is now more affordable, especially for low-income Filipinos who spend roughly 16 percent of their whole household budget on rice, thanks to the removal of local entrenched interests that profited from the protectionist stance on rice for decades.

On February 14, 2019, President Rodrigo Duterte signed the RTL into law as Republic Act 11203. The law, which went into effect on March 5, 2019, replaced quantitative limitations on rice imports with tariffs.

“After more than thirty years of fruitless attempts by prior administrations, the Rice Tariffication Law was finally passed. The bill “opened up the Philippine rice market, lowering the price of our country’s essential meal for over 100 million Filipinos,” said Finance Secretary Carlos Dominguez III in a statement on Sunday.

Rice is no longer a major contributor to inflation as a result of this change, which Dominguez initially suggested three decades ago while he was Agriculture Secretary.

“It needed the President’s great political determination to ultimately get rice tariffication for the benefit of our customers,” he continued.

The National Economic and Development Authority (NEDA) anticipates that three years from now, the proportion of malnourished children and the population in danger of famine in the country will be lowered by 2.8 percent and 15.4 percent, respectively, because of the RTL making rice more accessible.

According to the NEDA, these figures equate to about 2.1 million fewer people at risk of hunger and malnutrition.

Before the RTL, the retail price of regular-milled rice (RMR) reached PHP46.04 per kg in 2018. As of April 2022, the average price of this rice variety had dropped to PHP39.13, or PHP6.91 per kg, thanks to RTL.

Another significant benefit of RTL is the infusion of billions of pesos into the agriculture sector through the establishment of the PHP10 billion Rice Competitiveness Enhancement Fund (RCEF), which is solely dedicated to funding programs that will improve the competitiveness of palay growers by providing them with easy access to fertilizer, farm machinery and equipment, high-yield seeds, and low-cost credit; and by providing them with skills training programs on farm mechanization and automation.

Beginning March 5, 2019, all import tariffs collected from rice imports will go to the RCEF and other farm upgrading projects under the RTL.

The Bureau of Customs (BOC) has already collected PHP6.6 billion in duties from rice imports in the first four months of 2022, accounting for two-thirds of the annual RCEF budget of PHP10 billion.

Prior to the RTL, rice imports were monopolized by the National Food Authority (NFA), with a few private traders awarded import permits that allowed them to manipulate rice prices and supplies through hoarding and other manipulative techniques.

With RTL, the NFA’s responsibility has been reduced to securing emergency rice supplies sourced solely from local palay growers.

The government was able to tackle the coronavirus disease 2019 (Covid-19) crisis “with vigor on the food security front,” according to Dominguez, thanks to rice tariffication.

Despite logistical challenges caused by statewide mobility restrictions or lockdowns enforced to safeguard individuals and communities from the virus, he added, the government was able to keep produce flowing from local farmers to Filipino consumers.

According to Dominguez, the agriculture sector was “one of the brighter spots” in the Philippines’ response to the pandemic, thanks in large part to the RTL.

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