Rice tariff cut only benefitted importers not consumers – DA officials

MANILA, Philippines – Importers, instead of the Filipino consumers, are benefitting from the government’s policy of cutting tariffs of imported rice from 35% to 15%, a high-ranking official from the Department of Agriculture (DA) and the director of the Bureau of Plant Industry (BPI) said.

In the first quinta committee (dubbed as the “Murang Pagkain Super Committee”) hearing on Tuesday, November 26, lawmakers focused on the how the rice tariff reduction affected consumers and if it helped lower prices.

“Sino po ang nakikinabang sa tariff reduction? Dahil sabi ‘nyo kanina tumaas po ang importation, correct?” asked ACT-CIS Representative Erwin Tulfo.

“Is it the importer or is it the consumer ang mas nakikinabang? Kasi wala pong paggalaw ng presyo.”

(Who benefits from the tariff reduction? Because you said earlier that importation volume rose, right? Is it the importer or is it the consumer who benefitted? Because the price did not budge.)

BPI director Glenn Panagniban responded, “Kung ganoon po nga ‘yung premise, malamang po ‘yung pong mga nag-i-import po ang nag-be-benefit.”

(If that’s the premise, it’s more likely that those who import are the ones benefitting.)

DA Undersecretary Asis Perez, when asked the same question, answered: “Dito po sa senaryong ito, malinaw na hindi po si Juan at si Maria. Malamang po at siguro tayo na ‘yung pong nag-i-import ang mas nakinabang, hindi po talaga si Juan at si Maria.”

(In this scenario, it’s clear that it’s not [for] Juan and Maria. Obviously, and we’re sure of this, that those who are importing rice are benefitting from this and not Juan and Maria.)

Rise in importations, little decrease in prices

Because of the tariff reduction, the Bureau of Customs (BOC) said the government lost P12 billion in tax revenues.

This came despite an increase in imports, from last year’s 3.606 million metric tons (MMT) of imported rice up to the 4.162 MMT imported as of November 21 this year, according to the data from BPI.

Through Executive Order 62, President Ferdinand Marcos Jr. cut down tariffs on imported rice from 35% down to 15% in a bid to lower prices. They expected retail prices to lower by P7.

But according to data from Marikina 2nd District Representative Stella Quimbo, the retail price of imported rice only decreased by mere cents. Even with the increase in imports and a decline inflation rate right after the tariff reduction, prices did not fall.

“[I]f we look at the prices itself, ang liit ng binagsak,” Quimbo, who is an economist by training, said.

The lawmaker said the average imported rice price went from P51 per kilo to an average of P50.68 per kilo after the tariff cut.

“So ‘yun ang tanong natin diba?” she said. “Bakit hindi masyadong malaki ‘yung effect on the levels? So baka nga mayroong pagsasabwatan.”

(That’s our question, right? Why is there no huge effect? Maybe there is collusion.)

At Quimbo’s coaxing, the BPI named the top rice importers, which ways and means committee chair Joey Salceda read as follows:

1. BLY Agri Venture Trading
2. Atara Marketing
3. Horizon Free Enterprise
4. Macman Rice
5. RBS Universal
6. Kingbee Company
7. River Valley Distribution

The National Economic and Development Authority reviews the impact of tariff reduction every four months.

Since it took effect in July, the economic measure had been the subject of a Senate hearing and a petition before the Supreme Court. – Rappler.com