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Rice import tariff cuts should not depress farmgate prices — NEDA

THE proposed tariff cut on rice imports should not impact farmgate prices for palay (unmilled rice), National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said.

“As I said, any proposal to reduce tariffs must not reduce farmgate prices. Farmers must be protected,” he told BusinessWorld at the sidelines of the national budget plenary debates at the House of Representatives on Tuesday.

“Any proposal to reduce tariffs, we have to calibrate that particular issue, balancing the interests. Most importantly, protecting farmers (from) reduction in their farmgate prices,” he added.

The Department of Finance earlier proposed to temporarily slash the 35% ASEAN (Association of Southeast Asian Nations) and MFN (Most Favored Nation) rice tariff rates to zero percent up to 10%.

Asked if NEDA had proposed a specific percentage for the tariff cut, Mr. Balisacan said it is “too early to disclose anything.”

However, he noted that the tariff cut would not even be considered if oil prices were not elevated.

“If oil prices were not rising sharply, there should be no discussion of tariff reduction,” he said in a mix of English and Filipino.

Oil firms hiked pump prices on Monday by P2 per liter of gasoline, P2.50 per liter of diesel, and P2 per liter of kerosene.

Fuel prices have gone up by a total of P11.85 per liter for gasoline, P17.30 per liter for diesel, and P15.94 per liter for kerosene since the second week of July.

“Again, the context is that oil prices are rising, and sharply rising over the last couple of months. We would want to prevent that (from) spilling into the local economy, because we have quite high inflation still, especially for rice,” Mr. Balisacan added.

Headline inflation unexpectedly quickened to 5.3% in August from 4.7% in July, bringing the year-to-date average to 6.6%. This was well above the central bank’s 5.6% full-year forecast.

Rice inflation also surged to 8.7% in August from 4.2% in July due to tight supply.

“We want to make sure (fuel price spike) would not lead to sharp increases in rice prices, thereby making it even more difficult to cope with inflation, so we are studying this,” he added.

Meanwhile, Mr. Balisacan welcomed the hike in the purchasing price for palay.

“The increase in farm price is long overdue, it’s been lower than the prevailing market price, so that was a welcome move,” he said.

The National Food Authority Council on Monday approved a new buying price range for dry palay at P19-P23 per kilogram, and for wet palay at P16 to P19 per kilogram.

Data from the local statistics authority showed that the average farmgate price of palay increased by 9.4% year on year to P19.23 per kilogram in June.

To address rising prices, an executive order earlier this month set a price ceiling at P41 per kilo for regular milled rice and P45 per kilo for well-milled rice. — Luisa Maria Jacinta C. Jocson

#Rice #import #tariff #cuts #depress #farmgate #prices #NEDA

DoF defends plan to cut import tariffs on rice

DoF defends plan to cut import tariffs on rice

By Luisa Maria Jacinta C. Jocson and Keisha B. Ta-asan, Reporters

THE GOVERNMENT’S proposal to reduce import tariffs on rice will “balance the interests” of farmers, consumers, and the poorest, Finance Secretary Benjamin E. Diokno said.

“The Executive department is currently discussing at the highest level the proposal to reduce import tariffs on rice as part of a comprehensive strategy to reduce prices for consumers and mitigate a potential shortage of the staple due to the impact of the ongoing El Niño phenomenon,” Mr. Diokno said in a Viber chat with reporters on Monday.

He made the statement amid calls by agricultural groups to reconsider the tariff cut as this would lead to an influx in imports and harm local producers.

The Department of Finance earlier proposed to temporarily reduce the 35% rice import tariff rates to 0% or maximum of 10% in order to tame prices.

Monetary Board member and rice expert Bruce J. Tolentino said cutting the tariff rates for rice imports to 0% would impact government revenues.

“The tariff should be low, not zero. We need some tariff revenue to finance the RCEF (Rice Competitiveness Enhancement Fund),” he told BusinessWorld in a text message.

The RCEF is a component of the Rice Tariffication Law (Republic Act No. 11203), which opened up rice importing to private parties, who must pay tariffs of 35% on inbound shipments of grain from Association of Southeast Asian Nations (ASEAN) countries.

Of these tariffs, P10 billion a year is allocated to RCEF for six years to modernize rice farming practices, including support for mechanization and the acquisition of high-yielding seed.

Mr. Tolentino said that lowering the tariff rates to about 10% is the “most effective and efficient” measure to lessen prices of rice.

“The current tariff of 35% on rice from ASEAN, and 50% on rice from non-ASEAN countries, is severely constraining and induces non competitiveness among domestic rice producers,” he said.

Mr. Tolentino said the lowering of tariffs should be for the long term, not temporary.

“The entire tariff structure for the Philippines should be relatively low and uniform to ensure that tariffs do not disadvantage domestic value addition,” he said.

Earlier, Mr. Diokno said the proposed cut in rice tariffs can only be approved when Congress is in recess. Congress is set to adjourn on Sept. 30 and resume session on Nov. 6.

Meanwhile, Foundation for Economic Freedom (FEF) President Calixto V. Chikiamco in a Viber message said the FEF supports the reduction of tariff rates to 0% if it’s “politically feasible,” as lower rice tariffs would be better for consumers. 

However, the tariff cut should only be treated as a temporary solution.

“The long-term and more effective solution is to promote commercial agriculture through farmland consolidation. Increasing agricultural productivity requires the application of science, technology, capital and management and we can get them only by allowing bigger and better managed farms,” he said.

Kilusang Magbubukid ng Pilipinas (KMP) Chairman Rafael V. Mariano said in a statement that they continue to oppose the DoF’s tariff reduction proposal.

“A deluge of rice imports into the local market is also not a guarantee that retail prices will decrease,” he said.

Bantay Bigas Spokesperson Cathy L. Estavillo said that the tariff reduction will only benefit rice importers and big traders.

The US Department of Agriculture projects that the Philippines will import 3.8 million metric tons  during the marketing year 2023-2024.

Ms. Estavillo said if the country imports this projected amount with only 10% or a 0% tariff, this will cost the government “billions in foregone revenues.”

Meanwhile, Roy S. Kempis, a retired professor at the Pampanga State Agricultural University, said that the proposed tariff cut and recently imposed price cap on rice would benefit consumers at the expense of producers.

“Prices will be prevented from going up with the price cap; then the tariff reduction may further reduce prices to the consumers as more rice supplies go to the market driven by imports. Thus, they complement for the benefit of consumers; but not to producers,” he said in a Viber message.

He said these policies are not sustainable since the problem with rice prices is structural in nature.

President Ferdinand R. Marcos, Jr. earlier this month set the price ceiling at P41 per kilo for regular milled rice and P45 per kilo for well-milled rice.

Mr. Kempis recommended a “government-encouraged but market-driven farmgate rice price policy regime.” The price regime would allow farmers to have reasonable margins to sustain their production, he said.

“The above rice price policy will reduce expenditures on unnecessary rice programs that based on experience have provided government assistance that farmers do not need, or have been poorly designed and executed,” he added.

#DoF #defends #plan #cut #import #tariffs #rice

Soaring rice prices sow hope – and trouble – for indebted Thai farmers

Soaring rice prices sow hope – and trouble – for indebted Thai farmers

 – After finishing her latest rice harvest, Sripai Kaeo-eam hurriedly cleared her fields and planted a new crop in late August — ignoring a Thai government advisory to restrict further sowing of the grain this year to conserve water.

“This crop is our hope,” said the 58-year-old farmer in Thailand‘s central Chai Nat province, pointing to her green paddy seedlings only a few inches tall.

Ms. Sripai, who is trying to dig her way out of more than 200,000 Thai baht ($5,600) of debt, is motivated by the global spike in rice prices, which are close to their highest level in about 15 years after India — the world’s biggest shipper of the water-intensive grain — curbed exports.

Farmers across the agrarian heartland that makes Thailand the world’s second-largest rice exporter should be poised to benefit.

Instead, the amount of land under rice cultivation in Thailand decreased 14.5 percent in August compared to the same month last year, according to previously unreported government estimates. The figure has declined every year since 2020.

Thailand‘s centuries-old rice cultivation system is under severe stress from climate change, unsustainable farm debts and a lack of innovation, according to interviews with two experts and a review of government data.

These pressures on the sector, reported in detail for the first time by Reuters, are squeezing debt-laden Thai farmers despite tens of billions of dollars in subsidies over the past decade.

The handouts came in place of boosting agricultural research spending, which hammered productivity, the experts said. Many farming families are financially burdened after borrowing to fund their crops, according to government data, with debt now spanning generations.

A drop in cultivated land could slash Thailand‘s rice output, adding to already rampant food inflation after drought conditions in other key rice-producing countries and hitting billions of consumers for whom the grain is a staple food, said agricultural expert Somporn Isvilanonda.

Thailand exported 7.7 million tonnes of milled rice in 2022 to countries across the Middle East, Asia and Africa, according to Krungsri Research.

“The cultivated area is down because of lack of rainfall and irrigated water,” said Somporn, a senior fellow at the state-affiliated Knowledge Network Institute of Thailand (KNIT).

The water shortage is likely to worsen into 2024 as the dry El Nino weather phenomenon strengthens, according to government projections.

On the line for millions of farmers is not only their current crop, but a narrow window to escape a life crushed by debt. A good harvest could fetch prices that are up to double or triple that of most years, Ms. Sripai said.

“Now I am dreaming,” she said, “because India has stopped exporting.”

The Thai government’s rice department did not respond to questions sent by Reuters.

Rice is central to Thailand. A little under half its farmland is marked for rice cultivation, with over five million households involved, according to Krungsri.

Successive governments have spent 1.2 trillion Thai baht ($33.85 billion) on price and income interventions for rice farmers in the last decade, estimates Somporn.

“But the government didn’t do enough … to improve productivity,” he said.

Though prices are now high, “farmers cannot take the opportunity to produce rice,” Somporn said, adding that he expected output to drop around 30% over the next two growing seasons due to the water shortage.



On a sweltering August morning, dozens of farmers and land owners protested outside a state-run agricultural bank in Chai Nat, where they had waited overnight to meet officials.

Danai Saengthabthim, 60, was among those at the hours-long meeting, where he sought to convince officials not to seize his land for failing to repay debts that have swelled over two generations.

The Bank for Agriculture and Agricultural Cooperatives said it does not have a policy of confiscating land from farmers who unintentionally default.

He is now pinning his hopes on Thailand‘s new coalition government for help. “The debt has just kept increasing over time,” he said.

Even before the new government took office, Ms. Sripai and other farmers from the region made repeated trips to the capital, Bangkok, to lobby the agriculture ministry.

“All the farmers in our group have debts,” said Ms. Sripai, who pays a rate of 6.875% on her loan. “We got the debt when we faced droughts, floods, and pests.”

Thailand has one of Asia’s highest household debt levels. In 2021, 66.7% of all agricultural households were in debt, largely from farming-related activities, according to government data.

Prime Minister Srettha Thavisin said in his first policy statement before parliament last week that the government will seek to improve farm incomes.

“There will be a consolidation of water management resources, innovations … to increase yields as well as finding new markets for agriculture product,” he said, adding that there would also be a moratorium on some farm loans.

“Extreme weather patterns brought on by the El Nino phenomenon are creating risks for farmers.”Rainfall this year has been 18% lower than normal and key reservoirs are filled to only about 54% of total capacity, according to the Office of the National Water Resources.

Climate change will likely exacerbate matters, with experts expecting a decline in average rice yield and wider fluctuations in production.



The foundation for Thailand‘s rice sector was laid in the late 19th century during the reign of King Chulalongkorn, who promoted free trade and agricultural and land reforms, said Nipon Poapongsakorn, an agricultural expert at the Thailand Development Research Institute.

Decades of investment in research and infrastructure allowed farmers to switch to high-yielding varieties beginning in the 1960s, cementing Thailand‘s then-position as the world’s largest rice exporter, said KNIT’s Somporn.

“When you grow high yielding variety, you have to grow it in irrigated areas,” he said.

Thai governments largely steered clear of market interventions until former prime minister Yingluck Shinawatra in 2011 rolled out a scheme that paid rice farmers above-market rates for their crop, both experts said.

That move kicked off a decade of handouts that stymied productivity in Thailand‘s rice sector, leaving average yields per rai (0.4 acres) lower than those of Bangladesh and Nepal, said Nipon.

Yingluck was sentenced in absentia to prison on negligence charges for her role in the scheme that cost the state billions of dollars. She has previously denied wrongdoing and did not return a request for comment sent through a representative.

In 2018, according to data provided by Nipon, Thai farmers produced 485 kg of rice per rai, compared to 752 kg and 560 kg in Bangladesh and Nepal respectively.

“We got trapped in our success,” he said, underlining a drop in rice research investment from 300 million baht a decade ago to the 120 million baht allocated for this year. “Our rice variety is very old, our yield is very low.”

Farmers can only legally grow varieties approved by the government and could face challenges finding buyers if they were to grow variants from elsewhere, which may not be suitable for cultivation in Thailand, said Somporn.

In recent years, countries like India and Vietnam made sizeable investments in research, pulling ahead of Thailand in terms of productivity and gaining traction in the export market, the experts said.

The average Thai farmer’s income has dwindled. In the last decade, rice growers made positive net returns from their first crop in just three years, according to government data.

In the years since Ms. Sripai followed her family into the paddy fields, the challenges have multiplied, but current prices offer a rare opportunity.

“We’re hoping we can clear our debts,” Ms. Sripai said, sitting in front of a ramshackle wooden building where she lives. “We’re keeping our fingers crossed.” – Reuters

#Soaring #rice #prices #sow #hope #trouble #indebted #Thai #farmers

Diokno optimistic rice tariff cut will get presidential approval

Diokno optimistic rice tariff cut will get presidential approval

DUBAI — The Philippines’ finance minister on Tuesday expressed optimism that President Ferdinand Marcos Jr will approve a proposal to cut tariffs on imported rice, and that the measure could be implemented as soon as next month.

The finance and economic planning departments are proposing a tariff reduction to between zero and 10%, from the current 35% level, for rice imports as the government seeks to ease pressure on inflation. The country is one of the world’s biggest buyers of the grain.

Retail prices of rice further climbed in August, pushing up Philippine inflation, which accelerated for the first time in seven months to 5.3% year-on-year.

Asked if he thinks the tariff cut proposal will be approved, Finance Secretary Benjamin Diokno said: “I think so.”

Mr. Diokno was speaking to Reuters in an interview in Dubai, where he together with other Philippine economic officials held a briefing on the country’s economic growth prospects.

The briefing, organised by a group of local and global banks including HSBC, was part of the Philippine delegation’s broader aim to gauge investor interest from the United Arab Emirates in infrastructure and other opportunities in the Southeast Asian nation.

According to Mr. Diokno, Marcos can cut tariffs only when Congress, which is scheduled to adjourn by the end of this month, is not in session.

“I think in a week or two Congress will be out of session so that will be the perfect time (to cut tariffs),” he said.

National Economic and Development Authority Secretary Arsenio Balisacan, during the briefing, said inflation was the government’s “most immediate concern”, and efforts were being undertaken to bring it down.

The Philippine economy grew 4.3% in the second quarter from a year earlier, its slowest expansion pace in nearly 12 years, as high inflation and interest rates hurt consumer demand. That brought first-half growth to 5.3%, below the government’s 6.0%-7.0% target for the year.

Mr. Balisacan, however, said the government remained confident of hitting “at least the lower point of that range”. — Reuters

#Diokno #optimistic #rice #tariff #cut #presidential #approval

DTI says rice price cap may be lifted in 2 weeks

DTI says rice price cap may be lifted in 2 weeks

By Luisa Maria Jacinta C. Jocson, Reporter

THE GOVERNMENT may lift the price ceiling on rice in two weeks when the local harvest starts and more imports arrive, Trade Secretary Alfredo E. Pascual said on Monday.

“Within September, we are looking at 2 million metric tons of harvest and some entry of imported rice. So maybe within two weeks we should be able to see whether we can lift the price cap,” he said in an interview with ANC on Monday.

The government has been implementing a nationwide rice price cap since Sept. 5 to address a spike in prices of the national staple amid reports of hoarding and price manipulation by cartels.

The ceiling has been set at P41 per kilo for regular milled rice and P45 per kilo for well-milled rice.

Mr. Pascual told reporters that the price ceiling is needed to prevent a spike in retail prices of rice.

“In the next two or one and a half months, because we already started harvesting, we are looking towards a total harvest of 5 million metric tons and that is from our local farmers,” he said on the sidelines of the Asian Regional Conference in Support of Accelerated Life Sciences Innovation on Monday.

The Department of Trade and Industry (DTI) chief said around 90% of retailers in public markets have complied with the price ceiling.

“Our people actually gave warnings to retailers selling over the price ceiling. But what is important is that we have the supply and that the majority of the (retailers) are compliant,” he added.

Meanwhile, President Ferdinand R. Marcos, Jr. said that there is a need to ramp up rice production to bring down prices.

“We have had to control the prices of rice because the markets are very volatile, so we are trying to stabilize it here,” he said during a speech at the Mariano Marcos State University in Ilocos Norte on Monday.

“So, it’s correct that we have to increase our production. But we have to make sure that the increase in production redounds to the benefit of the farmer.”

Finance Secretary Benjamin E. Diokno reiterated that the economic team is in “full support” of the price cap on rice.

“We agree with the President that implementing a price cap on rice is the most prudent course of action at the moment to achieve two critical objectives: stabilizing rice prices and extending immediate support to our fellow countrymen,” he said in a statement.

This comes after Mr. Diokno told reporters on Friday the economic team were “surprised” about the announcement of the price cap, as they were in Japan at that time.

Meanwhile, analysts said the government should lift the price cap on rice instead of implementing a zero-tariff policy on rice imports.

“The zero tariff of course will bring down the price of rice, but supply shortage, especially in the aftermath of Indian rice export ban, and increasing local demand will still exert upward pressure on prices,” Filomeno S. Sta. Ana III, coordinator of Action for Economic Reforms, said via Facebook Messenger chat.

“But if the market price still exceeds the price ceiling, despite the zero tariff, don’t expect the exports to come in. So, remove the price ceiling. The price ceiling is not working, based on the stories of rice sellers. It will only exacerbate the shortage. The sooner it is removed, the better,” he added.

The Department of Finance (DoF) has proposed to temporarily slash the 35% rice import tariff rate to 0% or maximum of 10% to “arrest the surge in rice prices.”

Earlier, the Foundation of Economic Freedom (FEF) submitted a petition to the Tariff Commission to reduce the tariff rate on rice to 10%.

Former Agriculture Undersecretary Fermin D. Adriano said that the zero-tariff rate should be implemented until “rice prices stabilize near (to) what they used to cost during normal periods.”

However, Raul Q. Montemayor, national manager for the Federation of Free Farmers, said that the tariff cut will not benefit poor consumers, as most rice imports are premium grade.

“And there is no guarantee that importers and traders will pass on any tariff savings since they know that well-off consumers can afford to pay higher prices,” he said in a Viber message.

Mr. Montemayor said that reducing the tariff to 10% could result in a tariff loss of P9 per kilogram, which translates to a “potential decline in palay (unmilled rice) prices of P6 per kilogram.”

Meanwhile, the temporary reduction in tariff rates and toll fees could lower retail prices and alleviate inflationary pressures, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in a Viber message.

“This, however, may have an impact on domestic producers. This could be more market oriented and introduce less distortion to the market for food,” he added.

Apart from the tariff cut, the DoF is asking toll road operators to temporarily exempt trucks transporting agricultural goods from paying the recently adjusted toll fees.

“I support DoF’s position on exempting trucks from further toll fee increases so that operators will not raise delivery cost, which ultimately consumers pay through high food prices,” Mr. Adriano said.

Ateneo de Manila University economics professor Leonardo A. Lanzona, however, said that it is “unfair” to only exempt trucks, which favors large traders over smaller ones.

“Furthermore, it would not be fair to ordinary road users engaged in other forms of businesses. Worse, it does not really solve the problem of hoarding and smuggling, and may in fact reinforce it,” he added.

Mr. Montemayor also said that the exemption will not “significantly reduce rice prices or ensure the efficient transportation of rice.”

“The recent toll fee increase for large trucks is only P98 per passage. These trucks carry around 25,000 kilos of rice, so the savings amount to only P0.004 per kilogram,” he added.

The DoF’s proposal also includes encouraging the timely importation of rice by the private sector and fully implementing the super green lane.

“Giving them access to a super green lane will only encourage importers to undervalue their shipments and escape detection,” Mr. Montemayor added. — with Justine Irish D. Tabile

#DTI #rice #price #cap #lifted #weeks

Rice crisis in the Philippines sounds a global inflation alarm

Rice crisis in the Philippines sounds a global inflation alarm

SURGING RICE PRICES in the Philippines could be a warning sign for other major importers of the food staple as the fallout from India’s export restrictions continues to reverberate across Asia and West Africa.

Rice inflation in the Southeast Asian nation increased at the fastest pace in almost five years in August, reviving memories of a 2018 shock that led to the end of a two-decade-old limit on imports. The Philippine central bank warned this week that it’s ready to resume monetary tightening if needed, while diplomacy and deals reign elsewhere as other countries rush to secure supply.

“We’re seeing a great deal of uncertainty,” said Shirley Mustafa, an economist at the United Nations’ Food and Agriculture Organization. “Price pressure is being exacerbated by the restrictions.”

India’s restrictions have upended the market and prompted worried nations to secure supply as they try and contain the rising cost of rice, which is a vital part of the diets of billions of people across Asia and Africa. Manila has placed a cap on prices, a measure that’s led to the downfall of a finance official.  

Finance Undersecretary Cielo Magno said she will resign after a Facebook post that appeared to question the recently implemented price cap. The limit was imposed earlier this month after an “alarming” increase in retail costs.

Supply security is at the top of the agenda for many consumers. Philippine President Ferdinand R. Marcos, Jr. and Vietnamese Prime Minister Pham Minh Chinh met on the sidelines of the ASEAN Summit in Jakarta and are planning a five-year deal. Senegal is making diplomatic overtures to India, taking similar steps to other nations including Guinea and Singapore to ensure supply.

Indonesia has agreed to sign a supply agreement with Cambodia for the first time in over a decade. The memorandum of understanding is for as much as 250,000 tons a year, more than double the volume of a similar deal in 2012. Jakarta has already pledged to provide 10 kilograms of the grain each month to millions of poor families during the fourth quarter of this year.

Other nations are taking steps to stem rising costs. Malaysia has implemented a purchase limit and started checks on wholesalers and commercial millers after allegations that local grain was being sold as imported rice at a higher price. Myanmar has also imposed a mandatory system to record volumes of stored rice to control domestic prices and deter speculation.

Some heat came out of the market this week with Asia’s rice benchmark dipping slightly, but prices are still near the highest level since 2008. — Bloomberg

#Rice #crisis #Philippines #sounds #global #inflation #alarm

DoF eyes temporary zero tariffs on rice

DoF eyes temporary zero tariffs on rice

By Luisa Maria Jacinta C. Jocson, Reporter

THE DEPARTMENT of Finance (DoF) is proposing to temporarily slash the tariff rates for rice imports to zero to curb the spike in retail prices of the national staple.

“We need to adopt a comprehensive approach to help ensure that rice supply remains sufficient at reduced prices,” Finance Secretary Benjamin E. Diokno said in a press chat on Friday.

He said the DoF proposed the “reduction of the 35% rice import tariff rates, both ASEAN (Association of Southeast Asian Nations) and MFN (Most Favored Nation) rates, temporarily to zero percent or maximum of 10% to arrest the surge in rice prices.”

This as inflation unexpectedly quickened to 5.3% in August from 4.7% in July, driven by the rise in pump prices and food costs, particularly rice.

The government began implementing a nationwide price ceiling on rice last week, as part of efforts to address increasing prices of the national staple amid reports of hoarding and price manipulation by cartels.

The ceiling is at P41 per kilo for regular milled rice and P45 per kilo for well-milled rice.

Mr. Diokno said price ceiling on rice would likely last only a month. He noted that price controls, if “closely implemented,” are effective in the near term.

“However, the government recognizes that it also has adverse effects if allowed to linger for a longer period. The President has directed the economic team to implement measures that will mitigate the negative impact of the price controls on rice retailers and farmers,” he said.

The Finance chief admitted he was “surprised” when Mr. Marcos first announced the price cap on rice on Sept. 1. At that time, Mr. Diokno was in Tokyo with National Economic and Development Authority Secretary Arsenio M. Balisacan, and Budget Secretary Amenah F. Pangandaman for the Philippines-Japan High-Level Joint Committee Meeting.

“We were in Japan when that was announced. I was beside Arsi (Mr. Balisacan). We were surprised, of course,” he said in mixed English and Filipino.

On the proposed cut in rice tariffs, Mr. Diokno said this can only be approved when Congress is in recess. Congress is set to adjourn on Sept. 30 and resume session on Nov. 6.

The tariff reduction will also only require an executive order (EO) for its implementation.

“There’s no need for Congress… The President may adjust the tariff when Congress is not in session,” he said. “There is just a hearing, then the Tariff Commission will recommend, it needs an EO. The Tariff Commission will draft an EO to the President.”

Mr. Diokno said the temporary tariff cut will only be applied to rice and not include the other MFN rates for pork, corn and coal.

“The relaxing of the tariff is forward-looking because the price of rice is going up globally… rice is really, I think, the biggest contributor to inflation,” he said.

Food inflation quickened to 8.2% in August from 6.3% in the previous month. This was partly driven by rice inflation, which surged to 8.7% in August from 4.2% in July.

Apart from the tariff cut, Mr. Diokno said the government is seeking “cooperation with tollway concessionaires and operators for the temporary exemption of trucks that cater to agricultural goods from the increase in toll fees.”

Mr. Diokno noted that this would mean trucks would still pay the regular toll, but not the recently adjusted increases.

“The private concessionaires agreed with the proposal, they’re just trying to define the guidelines on how to identify these delivery trucks,” Finance Undersecretary Zeno Ronald R. Abenoja said.

The Toll Regulatory Board (TRB) will be in charge of issuing the guidelines for the toll exemption, he added.

To curb rice price increases, Mr. Diokno said the government will encourage the timely importation of rice by the private sector and fully implement the Super Green Lane to expedite rice imports.

“There is also a need to curb noncompetitive behavior in the rice industry by aggressively pursuing cases of hoarding, smuggling, and economic sabotage; strictly monitoring the prices of imported rice in the logistics chain; and encouraging the public, including retailers, to report individuals violating price caps on rice,” Mr. Diokno said.

“At the same time, we have to pursue programs to protect vulnerable sectors by safeguarding our farmers from the effect of the price ceiling; provide targeted subsidies to small traders and retailers of rice; and provide support to low-income households to address the impact of the surge in rice prices,” he added.

The Department of Social Welfare and Development began distributing a P15,000 cash subsidy to small rice retailers on Saturday.

Mr. Diokno said that there is a need for “timely, granular and accurate information on the status of the rice industry.”

“In this regard, the government must also devote more resources to satellite-based technology and data analytics to complement the dashboard,” he added.

#DoF #eyes #temporary #tariffs #rice

Compliance with price controls on rice estimated at 95% — DA

Compliance with price controls on rice estimated at 95% — DA

SOME 95% of retailers are complying with the price controls on rice, the Department of Agriculture (DA) said on Thursday.

“As of (Sept. 6) nare-report nating nagkaron tayo ng 95% success rate, which mean na nag-comply ang ating mga retailers (It has been reported that the price controls have had a 95% success rate, indicating that retailers have been compliant),” DA Director for Legal Services Willie Ann M. Angsiy said at a briefing.

Executive Order No. 39, which took effect on Tuesday, imposed a temporary price ceiling of P41 per kilogram for regular-milled rice and P45 per kilogram for well-milled rice as the government scrambled to contain rice prices.

Ms. Angsiy added the DA is continuing to “disseminate information” to non-compliant retailers on proposed subsidies to compensate dealers who will be selling their rice at a loss due to the price controls.

“Mabibigyan din natin sila ng ayuda basta sumunod lamang sila” (We will give them aid if they follow the price cap),” she said.

The Department of Social Welfare and Development (DSWD) has said that rice retailers will get up to P15,000 in subsidy to cover potential losses resulting from the price ceiling.

Ms. Angsiy said that the DSWD is currently working on the rules governing eligibility for the subsidy.

“But on the part of other government agencies, we are working closely with the local government units. Kinakausap natin ang mga mayor kung maari silang maka-provide ng assistance, (We are speaking with mayors about providing assistance),” she said.

She added that the DA is set to provide logistics services to directly deliver rice from farmers to retailers.

Meron din tayong market linkages, kung sakaling ma-short ng stock ang ating retailers. Siguradong may dadating na stock,” she said. (There will surely be stock because we are connecting producers to retailers).

She added that the DA is working with the private sector to ensure supply until the start of the harvest in October.

“By the end of October 2023, most of the estimated 2.92 million metric tons of palay will come from 15 provinces,” she said. “We assume that will be enough” to address high prices. — Adrian H. Halili

#Compliance #price #controls #rice #estimated

Vietnam proposes 5-year rice supply deal to PHL

Vietnam proposes 5-year rice supply deal to PHL

VIETNAMESE Prime Minister Pham Minh Chinh proposed a five-year rice supply deal to President Ferdinand R. Marcos, Jr., subject to negotiation at minister level, the Office of the President said on Thursday.

The proposal could “stabilize rice supply and pricing” in the Philippines “amid the current volatility in supply,” the Palace said in a statement, citing Mr. Marcos.

“I would suggest that the Ministries of Trade and Agriculture of the two countries will work together so that we can come up with a five-year agreement on supply of rice,” Mr. Pham told Mr. Marcos in a bilateral meeting with Mr. Pham on the sidelines of the ASEAN Summit in Jakarta on Thursday.

Mr. Marcos welcomed a long-term supply agreement as an opportunity to dampen volatility in domestic rice prices.

“The suggestion of a longer-term arrangement is an important one because just having that as an assurance will stabilize the situation, not only for the Philippines, but for all of us in the region,” he said.

“We will work continuously (to arrive at an agreement)… I am very confident that we will once again come to a consensus and agree,” he added.

The Philippines signed a rice supply deal with Vietnam in May 2008, with Vietnam selling the Philippines up to 1,500,000 metric tons of rice between 2008 and 2010 in a government-to-government transaction.

A 2019 law liberalized the rice import market, allowing private importers to ship in rice in exchange for the payment of a 35% tariff on grain from Southeast Asia. The law had removed the National Food Authority’s (NFA) role as monopoly rice importer, which it carried out through government-to-government deals.

“While this is a welcome agreement, this does not solve our problems,” Ateneo de Manila economist Leonardo A. Lanzona said, noting that long-term trade agreements “can vary in stability depending on various factors.” 

The stability of such a deal would depend on “the parties involved, the nature of the agreement, and external economic or geopolitical conditions,” he said via Facebook Messenger.

“Generally, agreements between stable, economically sound countries are more likely to be honored over the long term,” he said, noting that for middle-income countries like the Philippines and Vietnam, “a significant amount of risk exists.”

“Unforeseen events like economic crises, changes in political leadership, or shifts in international relations can potentially affect the stability of long-term trade agreements,” he said.

He said parties involved in such agreements must have mechanisms for dispute resolution and the flexibility to adapt to changing circumstances.

Vietnam supplies about 90% of the Philippines’ rice imports, with Manila receiving 1.5 million metric tons of rice from its neighbor in the first five months of the year.

The Philippines does not have a rice shortage at the moment, Jayson H. Cainglet of the Samahang Industriya ng Agrikultura (SINAG) said in a Viber message.

“Imports to be secured are only meant to be for buffer stock,” he said, noting that unlimited imports have not reduced the commodity’s retail price. “Only bountiful local harvests have resulted in lower rice prices.”

Agriculture officials, including Mr. Marcos, who serves as the Secretary of Agriculture, said last month that the country’s rice inventory is sufficient for the duration of the El Niño weather pattern, which is expected to persist until next year.

The Department of Agriculture (DA) also reported that an estimated 900,000 MT of rice was harvested in Isabela, Nueva Ecija and North Cotabato.

Agriculture Undersecretary for Rice Industry Development Leocadio S. Sebastian has said that improved yields for palay, or unmilled rice, in late September to October will provide a boost to second-half production, estimated at more than 11 million MT.

Before making a decision on the Vietnam supply deal, the Marcos government needs to disclose to the public the terms of the proposed arrangement, Jayson H. Cainglet of the SINAG said in a Viber message.

“At what price and terms? At what volume? At what tariff rates? What is the mode of importation — government-to-government or private initiative?” he said.

“We hope that discussions with any country for rice imports would NOT be at the expense of local producers and our hapless consumers,” he said.

The government last week imposed a price ceiling on the staple, blaming rising prices on hoarders and smugglers.

Economists have warned that imposing price caps on rice could limit supply and force traders to go underground.

They also said traders might exhibit a reluctance to buy rice from farmers, who will be left with no choice but to lower farmgate prices.

Palay prices fell by P3 per kilo in some areas after the order was announced, according to farmers’ groups.

Following the price cap order, Finance Undersecretary Cielo D. Magno left the administration, telling BusinessWorld on Thursday that her resignation will take effect on Sept. 16.

In a social media post on Thursday, Ms. Magno said, “A wise man told me, if you do your job with integrity, you will be back in UPSE.” She was referring to the University of the Philippines School of Economics.

President Ferdinand R. Marcos, Jr.’s economic managers have backed the price ceiling on rice, including NEDA Secretary Arsenio S. Balisacan, who said the measure would “immediately reduce” the price of rice.

Ms. Magno championed the Philippine Extractive Industries Transparency Initiative in the Finance department under the Marcos administration.

“I am not sure what will happen to PH-EITI,” she told BusinessWorld when asked whether the program will be continued after her departure from government.

Ms. Magno also chairs the DoF’s Fiscal Policy Monitoring Group and the Revenue and Operations Group, and Policy Development and Management Services Group.

She had been leading the government’s push to reform the pension system for retired military and uniformed personnel.

Meanwhile, the Palace said Mr. Marcos and his Vietnamese counterpart also discussed the possibility of a fisheries and maritime cooperation agreement to protect the livelihoods of fisherfolk.

“(The) agreement that we are proposing is very important because it (does) not limit itself only to security and defense issues,” Mr. Marcos said.

In 2014, Philippine authorities arrested 11 Vietnamese fishermen found poaching in Philippine waters close to disputed parts of the South China Sea.

“So again, we have an understanding between the two countries so that we will not have any problems between your fishermen and ours,” the Philippine leader told Mr. Pham. — Kyle Aristophere T. Atienza

#Vietnam #proposes #5year #rice #supply #deal #PHL