As the inflation rate in August hit a nine-year high of 6.4 percent, Senator Aquilino Pimentel III, head of the Senate’s trade and commerce committee, said the rice tarrification bill pending in the Senate was a “long-term solution” to the rice supply problems that had contributed much to the rising inflation rates.
But Senator Francis Pangilinan said rice tarification was not simple and not enough to address the rice crisis.
He said the government must ensure that the tariffs would really be paid to the government for rice to enter the country, and the proceeds should be used to strengthen local farmers.
Pangilinan told dzBB radio that the first thing to do to empower the farmers was to organize them.
“We have the program Sagip Saka, a partnership of the government and the private sector. I think its really just a matter of focusing,” Pangilinan said.
Earlier, central bank Governor Nestor Espenilla Jr. said rice was one of the culprits behind the rising inflation.
“The confluence of cost-push factors continued to drive consumer price inflation in August beyond the acceptable target range,” Espenilla said.
“Much of it has to do with food supply shocks. Rice in particular. These warrant more decisive non-monetary measures to fully address.”
Pimentel said replacing the quantitative restrictions on rice importation with tariffs and allowing the private sector to import rice would prevent the rice supply fluctuations the Philippines was suffering.
He attributed the rice shortage to the missteps by the government-run National Food Authority and the manipulation by rice traders and smugglers who take advantage of supply issues to influence rice prices.
“Right now, we depend on the judgment of several government officials who are tasked to determine how much rice we should import, and when we should import it, Pimentel said.
He was referring to the NFA Council, which is composed of the NFA Administrator and representatives from government agencies and institutions like the National Economic Development Authority, the central bank and the Office of the President.
“The mandate appears simple enough, but so many factors prevent them from fulfilling their mandate properly, Pimentel said.
“When they have disagreements and cannot get along, crucial policy decisions are delayed, and when this happens, it is the consumers who pay the price––who literally pay higher prices for an important food staple like rice.”
Pimentel said the belated action of the NFA Council to import rice to supply rice to the areas with shortages in Mindanao and its failure to increase the buying price of unmilled rice were examples of “policy paralysis that had rendered the body ineffective.
“With the private sector involved in rice importation, businessmen will bring in rice when the market requires it, and will not when there is an abundant supply in the market. They will try to find the best prices so they can sell their product at competitive rates while ensuring profits for themselves,” Pimentel said.
In his State of the Nation Address in July, President Rodrigo Duterte said rice tarrification was among the long-term solutions that the government was working on to lower inflation, to provide farmers with additional resources and to reduce rice prices by up to P7 a kilo.