The Foundation for Economic Freedom (FEF) said Monday it strongly opposes the rice import ban and the Department of Agriculture’s (DA) plan to raise the rice tariff from 15 percent to 35 percent, saying the measures would be a “significant setback” to economic liberalization and consumer welfare.
FEF said in a statement that a liberalized trade, guided by market signals, remains the most effective way to ensure food security and affordable prices for Filipino consumers.
The opposition comes after a decline in farm-gate palay (unhusked rice) prices, which has spurred some populist groups to pressure the government for short-term fixes, including extending the two-month rice import ban until the end of the year and increasing the rice tariff, it said.
The temporary two-month import ban was deemed a failure by the FEF, as farm-gate palay prices currently hover from a low of P8 to P14 per kilogram, below the 2024 production cost of P14.53, according to the Philippine Statistics Authority.
Economists warned that raising the rice tariff to 35 percent would likely increase the country’s overall inflation. Food and non-alcoholic beverages contribute around 43 percent annually to total inflation, with rice expenses making up about 20 percent of food inflation.
The burden of increased prices would disproportionately affect the poorest 30 percent of Filipinos, as around 50 percent of their income goes toward purchasing food, largely rice, it said.
FEF said that from a cost-benefit analysis, raising the rice tariff to 35 percent would benefit less than 5 percent of the total population—the estimated 2.2 million full-time and part-time palay farmers—while penalizing the remaining 95 percent of Filipino rice consumers.
The group recommended several alternative measures to support farmers without distorting the market, including immediately lifting the import ban, maintaining the current 15 percent rice tariff and having the DA focus on improving the local industry’s productivity through investments in public goods services like research and development, irrigation, and infrastructure.
They also suggested providing direct cash assistance to negatively affected farmers instead of defending a floor price for palay, noting that the rice market has historically stabilized on its own after a lag time of four to six months.
