The Federation of Free Farmers (FFF) warned the government Sunday it may lose as much as P100 million in customs duties or more if rice import volumes from non-ASEAN countries increase once Executive Order 135 is enforced.
Based on the recommendation of the National Economic Development Authority (NEDA) Board, EO 135 issued on May 15 will bring down the 50 percent out-quota and the 40 percent minimum access volume (MAV) tariffs on rice imports to 35 percent for one year.
The EO intends to “diversify the country’s market sources, augment rice supply, maintain prices affordable, and reduce pressures on inflation.”
“There is no need to diversify the foreign sources of our rice because, under the Rice Tariffication Law, importers are already free to bring in rice from any country for as long as they pass our quarantine regulations,” said FFF National Manager Raul Montemayor.
“Aside from Vietnam and other ASEAN countries, we have been consistently importing from nine other countries, including India and Pakistan, and more recently China,” he said.
“Similarly, there is no urgent need to augment our rice supply,” Montemayor said. “The Philippine Statistics Authority (PSA) pegged our March 1 national rice inventory at 2,080 million tons, or only 4.5% lower than last year.”
“This stock level would have already been augmented by the recent dry season harvest. The Department of Agriculture (DA) in turn has repeatedly claimed that we have ample rice supply and has even announced plans to increase our output by one million tons in 2021,” he added.
The group noted that funding for the Rice Competitiveness Enhancement Fund (RCEF) and similar support programs for farmers may correspondingly go down due to the potential income loss from lower tariffs.
A recent assessment on rice inventory showed there has been no significant decline in rice imports, with 610,428 thousand tons coming in between January and March 2021, only 3 percent lower than the volume brought in during the same period in 2020.
Meanwhile, international rice prices have started to soften, Montemayor said.
Free on-board rate for Vietnamese rice at 5 percent brokens was at $480 per metric ton (MT) in April 2021 from $515 in 2020, according to the Bureau of Customs (BOC).
The federation added that domestic rice prices have remained stable and that inflationary pressures have been due to increases in the prices of pork and fish, not rice.
“The average price of regular-milled rice (RMR) actually went down from P37.89 in 2019 to P36.93 per kilo in 2020. Similarly, retail prices for well-milled rice went down from P42.73 to P41.67 per kilo,” Montemayor said.
Data from the BOC also indicated there were no significant differences in import costs between rice from Vietnam and non-ASEAN countries despite the current differential in tariff rates.
In 2020, Vietnam rice with 5 percent brokens came in at an average of P29.75 per kilo, compared to P30.29 for a similar grade from India.