THE National Economic and Development Authority (Neda) has warned that delaying the conversion of the quantitative restriction (QR) on rice into tariffs will be costly for the local livestock sector and for consumers.
There’s another reason for the urgency: conversion of the rice QR into tariff, along with the unconditional cash transfers (UCTs) and fuel vouchers, would help ease the impact of inflation on the country’s vulnerable sectors, an official of the Department of Finance (DOF) said.
Finance Assistant Secretary Ma. Teresa S. Habitan said scrapping the rice QR would help stabilize rice supply and prices. This, Habitan added, will help the poor as rice accounts for 20 percent of their consumption.
Neda Undersecretary Rosemarie G. Edillon told the BusinessMirror in an interview that the bill amending Republic Act (RA) 8178, or the Agricultural Tariffication Act of 1996, is still pending in Congress. Congress will go on sine die adjournment starting on May 31.
This means that a new rice-tariff law will not be passed next month, or nearly a year after the World Trade Organization’s (WTO) special waiver on rice expired on June 30, 2017. The Neda hopes that the bill amending RA 82178 will be passed by October, before talks are held at the WTO.
“By October, if we still cannot report any substantial progress on the action we have taken, then it will be difficult for us. Our trading partners might ask for further concessions. Worse, we might be sanctioned, but that’s the worst-case scenario,” Edillon said.
She disclosed that the Economic Development Cluster, led by Finance Secretary Carlos G. Dominguez III and Socioeconomic Planning Secretary Ernesto M. Pernia, will issue a memorandum to the President to certify as urgent the rice-tariff bill.
But the memorandum would need to be accompanied by a committee report from the House and the Senate. However, only the House of Representatives has completed a committee report, which is required to prove that only deliberations are needed to pass a certain bill.
Edillon disclosed that the amendment of RA 8178 was not certified as urgent last year because the memo did not include a committee report that will provide evidence of the discussions at the House and the Senate.
“We’re writing to the President. We’re actually updating a memo to the President about why we need to have a rice-tariff law and our request is that its passage will be certified as urgent. It will be endorsed by [Dominguez and Pernia],” she said.
The Neda official added it is “crucial” that substantial progress be made by the Philippines on amending RA 8178. Trading partners, such as Australia, Thailand and the United States, have recently raised questions regarding the country’s efforts to scrap the rice QR.
These countries may ask for more concessions if the Philippines fails to make substantial progress on converting the rice QR into tariff. Australia and the US may seek expanded market access for their livestock products, while Thailand may request for a higher minimum access volume for its rice.
“In the meantime, we extended our concessionary agreements. The EO [executive order] extending the concessions was good for three years or until a law is passed,” Edillon said.
“But I reckon that we will be required to provide updates from time to time and I think if there is no substantial progress, then that will be a red flag for them,” she added.
Party-list Rep. Jose T. Panganiban Jr. of Anac-IP, chairman of the House Committee on Food and Agriculture, said members of his panel will sponsor the measure when session resumes in July.
“We may start tackling the tariffication bill in July as our focus is on the passage of the Bangsamoro basic law,” Panganiban said in a text message.
The substitute measure amending RA 8178 is now pending before the House plenary.
Cushion against TRAIN
Meanwhile, Habitan said, referring to the conversion of the rice QR into tariff, said the unconditional-cash transfers and fuel vouchers, “The impending passage of the national ID system law will complement these programs given the ambitious target of delivering social-welfare benefits to 10 million poorest family beneficiaries.” She made the remarks ahead of the resumption of the House Ways and Means Committee hearing on the second tax-reform package of the Comprehensive Tax Reform Package (CTRP).
Based on estimates made by the Bangko Sentral ng Pilipinas (BSP), scrapping the rice QR alone will immediately lower inflation rate by 0.4 percentage point, according to Habitan.
Pernia also said removing rice import caps will give consumers a reprieve from high rice prices. He added converting the QR would cut inflation by 1 percentage point.
This is possible since food accounts for over 30 percent of the consumption of households and the bulk of this is accounted for by rice, the country’s staple.
With Rea Cu
Image credits: Roy Domingo