THE National Economic and Development Authority said majority of Filipino families will benefit from lower retail prices of rice once the amendment of the agricultural tariffication law is enacted.
Amending Republic Act No. 8178, or the Agricultural Tariffication Act” of 1996, is expected to ease the temporary inflationary impact of the newly-implemented tax reform law, besides world oil prices, as well as increase the savings of a Filipino household.
“About 93 percent of Filipino households are rice consumers and they stand to benefit from lower price of rice. It is high time that the bill amending the two-decade-old law is passed,” Economic Planning Secretary Ernesto Pernia said Friday.
According to Neda’s preliminary estimate, headline inflation rate would be reduced by 1 percentage point if the domestic wholesale rice market reduced its price to the level of imported rice. Even with just a P1.00 per kilo reduction in the wholesale price of rice, headline inflation rate would drop by 0.3 percentage points.
At 35 percent tariff rate, the landed cost of imported rice, especially from Thailand and Vietnam, along with its transport cost to the local market, would be around P30.30 per kilogram. This is about P4.31 lower than the domestic wholesale price of regular milled rice.
The price reduction of P4.31 per kilogram will enable a Filipino household of five to save as much as P2,362 per year.
“This amount of savings could mean a lot to ordinary Filipinos, especially those struggling to make ends meet,” Pernia said.
Pernia said the amount of savings was equivalent to about 13 percent of a household’s average rice expenditure of P17,921 as indicated in the 2015 Family Income and Expenditure Survey.
The passage of the bill amending RA 8178 will pave the way for the lifting of the quantitative restriction on rice imports and the imposition of 35 percent tariff on rice coming from member-countries of the Association of Southeast Asian Nations like Thailand and Vietnam.
Since the Philippines became a member of the World Trade Organization in 1995, it had secured a waiver to extend the imposition of QR on rice imports several times to allow local farmers to prepare for competition.
With the expiration of the Philippines’ “Waiver on the Special Treatment of Rice” on June 30, 2017, there has been increasing pressure from WTO member countries for the Philippines to fulfill its obligation to place a tariff on rice, Pernia said.