‘Bahala na” is a popular expression in the Philippines, reflecting the propensity of Filipinos to take risks or take leaps of faith, never mind the consequences. Filipinos believe that all it takes is “lakas ng loob” or courage. Be it a new business venture or a career move, Filipinos will say bahala na. This bahala na mentality is also pervasive among our bureaucrats. And nowhere is this more evident than in the way the government is currently handling the country’s shift to an open rice market.
This shift is not something that is happening overnight; it is inevitable because this is the commitment of the Philippine government to the World Trade Organization. The quantitative restriction (QR) on rice, which has allowed Manila to limit the volume of rice that the Philippines can import, will be removed 24 years after the country joined the WTO. With the removal of the rice QR, farmers and consumers will be at the mercy of the international market.
The government should have rolled out the necessary interventions to help farmers cope with the removal of a nontariff measure that has protected them for decades. And these interventions should have been put in place right after the Philippines became a member of the WTO on January 1, 1995. But a comprehensive strategy, one that would enable rice farmers to compete with their foreign counterparts, is yet to be crafted.
The rice QR, or the import cap, would be converted into tariffs after President Duterte signs the bill mandating its removal. The bill, which was approved by the bicameral conference committee, would automatically lapse into law on February 15 if the President will not act on it. As expected, those affected by the measure—farmers, rice millers and retailers—are up in arms against it.
The significance of the proposed Rice Tariffication Act may have been lost on many of our bureaucrats. Take for example the crafting of a road map that details strategies to assist rice farmers. It is mind-boggling, to say the least, that the road map will only be rolled out after the enactment of the rice tariff bill.
We hope the government has a good reason for not crafting the road map, and pray this is not a case of bahala na mentality.
Also, pronouncements that the government did not study the impact of the provisions of the bill, such as the exit of the National Food Authority from the domestic rice market, won’t placate stakeholders or put them at ease. (See, “No rice price spikes despite NFA power removal, says Neda,” in the BusinessMirror, February 11, 2019.) Opening up a market that sustains 2.4 million Filipino farmers and thousands of millers and retailers sans a plan in place to ease the transition will likely kill their livelihood. Rice millers had warned that the bill would even hurt banks, as the projected decline in palay output will cause them to go out of business and may eventually default on their commercial loans. (See, “Banks to feel more pain from rice tariff bill than default of Hanjin,” in the BusinessMirror, February 5, 2019).
The government had 24 years to prepare for the day when the Philippines would finally give up the rice QR. And the full impact of the removal of the nontariff measure will only be felt later. We hope the road map and the rules that will implement the proposed rice tariffication act will mitigate its adverse impact on a sector that has anchored the performance of Philippine agriculture for decades.