THE incoming administration can only bring down the cost of rice to around P20 to P30 per kilo if the government will help increase the productivity of farmers instead of “blindly” providing subsidies, according to the National Economic and Development Authority (Neda).
In a virtual briefing at the Kapihan sa Manila Bay on Wednesday, outgoing Socioeconomic Planning Secretary Karl Kendrick T. Chua said there is room to bring down the price of rice because Southeast Asian countries are able to produce the staple at a lower cost.
Chua said the cost of producing rice in Vietnam and Thailand, also predominantly rice-consuming nations, are 70 to 100 percent lower than in the Philippines. Currently, he said, rice averaged P35 to P45 per kilo.
“Kaya naman [it can be done] if we help farmers improve productivity instead of blindly giving subsidies na wala namang na-po-produce na [without] efficiency improvements and I think the rice tariffication and the RCEF [Rice Competitiveness Enhancement Fund] are the tools to help achieve those,” Chua said.
The law, Republic Act No. 11203, not only replaced quantitative restrictions on imported rice with tariffs, but also created the RCEF.
The RCEF consists of an annual appropriation of P10 billion in six years to fund programs for farm mechanization, seed development, propagation and promotion, credit assistance, and extension services.
These programs were specifically identified to improve the productivity of rice farmers, reduce production costs, and link them to the value chain.
The excess from the P10-billion tariff revenue collection will be appropriated by Congress the following year for the direct financial assistance to rice farmers, titling of agricultural rice lands, expanded crop insurance program, and crop diversification program.
“The farmers need the support and the money is coming from the tariff from the rice tariffication. So, one way to think about it is, if we change the rice tariffication law, then we will not have the money to support the farmers,” Chua said.
Taxes
APART from the RTL, Chua said, the outgoing administration does not recommend any tweaking of the tax reforms that were recently instituted.
For one, Chua said, the Tax Reform for Acceleration and Inclusion Law (TRAIN Law) paved the way for the reduction in income taxes for 99 percent of income tax payers.
“Whether you’re an individual or corporation, we have expanded the tax base to fund all the human capital and infrastructure programs that we are benefiting from so we do not recommend changing the present,” Chua said.
Chua added that tweaking or reducing the excise taxes on fuel will also not be beneficial.
The reduction of fuel taxes, he said, will only favor the richest 10 percent of the population who consume 50 percent of fuel products, many of whom have their own cars.
Public transport, he said, helps reduce the country’s dependence on fuel. This is the reason for pushing a variety of mass transport infrastructure projects such as Bus Rapid Transits and railways.
Chua noted that the government has also provided facilities for alternative transport such as 500 kilometers of bike lanes, which were undertaken during the pandemic.
The government has also pushed for the PUV modernization program which advocates for cleaner engines and fuels.
“Even with the high fuel price, the traffic is not [easing]. If you see the roads, that’s because the majority of fuel is consumed by the richer families. So we will just be subsidizing [them]. I’d rather keep the excise tax and use excess revenue to support the commuters,” Chua said.
Revenue measures to be proposed by the outgoing administration will soon be unveiled by the Department of Finance (DOF). It will provide greater detail in the administration’s proposed fiscal consolidation plan.
Earlier, Finance Secretary Carlos G. Dominguez III said sustaining the fuel-marking program will be included in the list of their recommended measures for the next economic team as it helped beef up revenues for the government.
Dominguez said he believes the fuel-marking program should be continued by the incoming administration. (Read the story here: www.businessmirror.com.ph/2022/05/17/fuel-marking-among-dofproposals-to-new-admin/).