Prices of Rice Expected to Drop By P7.00 Per Kilo After Lifting Quantitative Restrictions on Imports

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Pres. Rody Duterte promised during the campaign period that he will do everything to make the prices of rice become stable, and as part of his promise the Department of Finance announced that the lifting of the quantitative restrictions (QR) on rice imports in favor of tariffs will bring down rice prices by as much as P7 per kilo.

DOF Undersecretary Gil Beltran said that a 35-percent import tariff on rice in lieu of restricting rice import volumes would encourage private traders to bring in the staple into the country, which would, in turn, allow the influx of cheaper rice in the domestic market.

According to Undersecretary Beltran, the Philippines ranks fourth among the five other Asian countries (Vietnam, Thailand, India, China and Indonesia) in terms of palay (rice) production cost.

The country’s average cost in producing this staple is about 10 percent higher than those of these Asian countries and 48 percent higher than the least cost producer.

The quantitative restrictions was adopted by the Philippines since the year 1995, it had allowed the country to limit the volume of rice imports with average tariff of 35 percent. Imports outside the designated volume would result in a higher tariff rate.

Last June 30, 2017, the QR expired after the economic managers earlier decided to allow its expiration by not applying for another extension before the World Trade Organization (WTO).

The QR lifting is expected to help free some 730,000 Filipinos from poverty who spend at least 20 percent of their budget for rice based on the studies done by the National Economic Development Authority (NEDA).

According to DOF, reducing rice prices is crucial to poverty reduction because the staple is a major driver of inflation. The tariffication would generate P27.3 billin which the government can use to augment funding for social protection projects like cash transfers for the poorest families as well as for palay productivity programs.

Source: PNA

Ed Umbao

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