The failure to amend a law exempting rice from tariffication could lead to “adverse consequences” for the country’s farm sector, the National Economic and Development Authority (Neda) warned on Thursday.
Neda Director General Emmanuel F. Esguerra said amending Republic Act (RA) 8178 must be a priority of the incoming administration. RA 8178 allowed the government to impose a limit on imported rice that will enter the Philippines in the form of quantitative restriction (QR).
The QR, a nontariff measure that allows Manila to limit access of other countries to the Philippine rice market, will expire in July 2017.
“[The law] needs to be amended in preparation for the expiration [of the QR on rice] in 2017, because if that doesn’t happen, then I think that would lead to certain adverse consequences as far as our trade is concerned, in particular our agriculture sector,” Esguerra said.
Following its accession to the World Trade Organization (WTO) in 1995, the Philippines agreed to liberalize agricultural trade by converting QRs on farm products into ordinary customs duties.
At the time of its accession to the WTO, the Philippines and other countries, like Japan and South Korea, sought to exempt rice from tariffication.
The recent extension sought by the government allowed the country to enjoy the QR on rice until next year. It has been in place since 1995.
The special treatment on rice was initially extended to countries where rice is a staple—Japan, Korea and the Philippines.
However, over time and with the exemption of the Philippines, other countries were no longer given preferential treatment, allowing rice imports to flow freely through these markets.
Sans an amendment to RA 8178, which did not specify an end date for the exempting rice from tariffication, Manila would be forced to seek another extension for the QR. The Philippines would be forced to give more concessions to retain the nontariff measure.
“Preparations ought to be made for the eventual expiration of the Philippines’s waiver on the quantitative restrictions,” said Esguerra, who is also the country’s economic planning secretary.
Apart from the amendment of RA 8178, Esguerra said the next administration must also prioritize the full implementation of the recently enacted competition law.
The law provided for the creation of the Philippine Competition Commission (PCC), a quasi-judicial body that shall be responsible for the implementation of a national competition policy pursuant to the legislation.
The PCC, now led by former Neda Director General Arsenio M. Balisacan, has already crafted the law’s implementing rules and regulations (IRR).
“Recently the PCC just completed the drafting of the IRR and there are consultations happening with respect to that,” Esguerra said.
He also added that the next administration must pursue reforms that seek to reduce the cost of doing business, addressing the infrastructure gap, rationalize fiscal incentives and comprehensive tax reform.