The law that sought to further open up the Philippines’s rice sector is also expected to boost the country’s GDP, according to the latest estimates of the National Economic and Development Authority (Neda) and the International Food Policy Research Institute (Ifpri).
In a statement, Neda said preliminary estimates showed that the rice trade liberalization law will add 0.44 percentage points to the country’s economic growth. This is based on a 35-percent tariff rate.
This means that if the country’s economic growth is at 6 percent, adding the impact of the rice trade liberalization law will mean GDP will reach 6.44 percent.
“The agriculture sector would expand as there would be more crop diversification—as uncompetitive rice areas shift to other high-value crops with relatively higher net returns,” the Neda said.
Neda Undersecretary for Policy and Planning Rosemarie G. Edillon said the reform, which was advocated by the oversight agency, will also boost investments in agriculture.
Edillon said prior to the passage of Republic Act (RA) 11203, the government monopolized rice trade nationwide. Only the National Food Authority (NFA) was authorized to import rice, the country’s food staple.
However, with the new law, Edillon said more investments can come in given that the NFA’s powers to import rice have already been amended under RA 11203.
“Before the rice tariffication law was passed, the government had been monopolizing the rice trade. This setup had been restricting the flow of private funds going to the sector,” Edillon said.
“We have conducted similar studies on this. But we want a model that integrates climate change into farmers’ decisions,” she added.
The Neda also said the world rice market is capable of supplying the additional import demand of the Philippines in the long run with minimal increases in prices.
The accessibility of affordable rice will contribute to lowering domestic rice prices that will benefit everyone especially the poor, it added.
The study also emphasized the need to support local rice farmers by assisting them to improve productivity, providing cash transfers in the short run, and helping them in the adoption of climate-resilient technologies.
“The agriculture sector, particularly the rice sector, is vulnerable to climate shocks, which have been increasing in frequency and intensity. So we want to be prepared and provide interventions ahead of time,” Edillon said.
Neda and Ifpri conducted an assessment on the projected impact of the removal of the quantitative restriction on rice and climate change on the agriculture sector.
Initial results were presented in a recent policy forum attended by representatives of concerned government agencies and nongovernment organizations in Pasig City.
RA 11203 liberalized the country’s rice trade by removing the quantitative restriction on imports, and transformed the NFA into a buffer-stocking agency.
Officials of the agriculture department sounded the alarm last week that the government could face lawsuits if it implements the rice trade liberalization law on March 5 even without the IRR.
Some groups are looking into the possibility of securing a temporary restraining order against RA 11203 from the Supreme Court.
Image credits: Nonie Reyes