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DOF clarifies: Rice tariffication law takes effect on March 5

By: Ben O. de Vera - Reporter / @bendeveraINQ
Inquirer Business / 04:16 PM February 19, 2019

MANILA, Philippines – The Rice Tariffication Act takes effect on March 5 — not
March 3 as earlier announced, with up to P11 billion in import duties expected to be
collected under the law during its first year of implementation, the Department of
Finance (DOF) said Tuesday.

Separately, the country’s chief economist said the law will bring down domestic rice
prices closer to global prices, hence, ensuring the availability of cheaper supply in the
market.

In a statement, Finance Assistant Secretary Assistant Secretary Antonio Joselito G.

Lambino II explained that since Republic Act (RA) No. 11203 was published in the
Official Gazette on February 18, the removal of rice import quota will start 15 days
later or on March 5.

President Rodrigo Duterte signed RA 11203 on February 14.

However, during last Monday’s National Food Authority (NFA) Council meeting, “the
members assumed that the publication of the law was done on Feb. 15, hence, they
agreed that imposing tariffs on rice imports should start on March 3,” Lambino
explained.
 The following tariff rates will apply under RA 11203:

 35 percent if rice was imported from within Asean;

 40 percent if within the minimum access volume (MAV) of 350,000 metric tons for

imports coming from countries outside Asean; and

 180 percent if above the MAV and from a non-Asean country.

The rice tariffication law also took away NFA’s commercial functions and regulatory
powers, only retaining its emergency buffer stocking mandate.

With the removal of the rice import quota or so-called quantitative restrictions (QR),
prices of the Filipino staple food were expected to be slashed by P2-7 per kilo, and
would bring down the inflation rate by 0.6 percentage point this year, Lambino said,
citing Bangko Sentral ng Pilipinas (BSP) estimates.

The government would collect P7-11 billion in tariffs during RA 11203’s first year of
implementation, he added.

During the NFA Council meeting led by Finance Secretary Carlos G. Dominguez III,
the interagency body ordered the grains agency to submit a restructuring plan within 30
days instead of NFA’s proposal to do so during a 180-day period.

For Dominguez, “30 days is sufficient to make a plan,” he said in a Viber message to
finance reporters.
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The NFA Council also green-lighted transferring the functions of NFA to the
Department of Agriculture (DA), as well as the transfer of the Food Development
Center from NFA to DA during a shorter period than the proposed 60-day period.

Asked if the government can already implement the Rice Tariffication Act on March 5
even as its implementing rules and regulations (IRR) was still being crafted,
Dominguez replied: “The provisions of the law are very clear.”
“There are parts of the law that are clear, upfront and can be implemented earlier than
the parts of the law that require an IRR to implement. So the heart of the reform, which
tariffies rice importation with the least government intervention, will be implemented as
soon as possible to bring down rice prices for more than 100 million Filipino rice
consumers,” Dominguez said.

For its part, the state planning agency National Economic and Development Authority
(Neda), which leads the crafting of the IRR, said in a statement also on Tuesday that a
draft of the proposed guidelines “will be subjected to public consultation in the coming
days.”

“The draft IRR contains provisions on the removal of NFA’s regulatory powers and the
streamlining of import requirements. It also provides details on the necessary
institutional arrangements that will enhance competitiveness and institute safety nets to
assist local farmers affected by the removal of the QR on rice imports,” Neda said.

“Anyone, whether a small or a big trader, can now import as long as they have secured
a phytosanitary clearance from the DA and paid the corresponding tariff. By removing
the NFA’s decades-old monopoly on rice importation, we promote greater participation
of the private sector and enhance competition in the market,” said Socioeconomic
Planning Secretary Ernesto M. Pernia.

Also, “the law provides sure and transparent support to farmers through a
comprehensive assistance program to the tune of at least P10 billion a year for the next
six years,” the Neda chief added.

“In particular, the Rice Competitiveness Enhancement Fund (RCEF) will be used to
provide key interventions to support farmers and enhance their competitiveness and
profitability, including farm machinery and equipment to improve farm operations, rice
seed development, propagation, and promotion, expanded rice credit, and extension
services. A portion of the rice tariff revenues in excess of P10 billion will be used to
provide direct financial assistance to rice farmers affected by the removal of the QR and
for diversification to high-value crops,” Neda said.
“The law also grants the President the power to increase, reduce, revise or adjust
existing tariff rates to safeguard Filipino farmers. In case of imminent danger of rice
shortage, the bill empowers the President, for a limited period and for a specified
volume, to allow importation at lower tariff rates for the benefit of consumers. The bill
also enables the President to increase the applied tariff to more than 100 percent (but
not to exceed the specified bound rate) if warranted,” according to Pernia.

“A special safeguard duty on rice will also be imposed to protect the rice industry from
sudden or extreme price fluctuations. A safeguard duty is a temporary increase in
import duty of an agricultural product to deal with import surges or price falls, under
the WTO [World Trade Organization] Agreement on Agriculture,” he also said.