Manila will allow rice imports beyond the country’s minimum access volume (MAV) after the National Food Authority Council (NFAC) approved the out-quota guidelines on Wednesday to further boost the Philippines’s stockpile.
Agriculture Secretary and NFAC Chairman Emmanuel F. Piñol said interested traders may start applying for permits to import rice at the NFA on November 22.
“The purpose of the importation is to bring down the prices of rice,” Piñol told reporters in an interview after the NFAC meeting on Wednesday.
Rice imports within the MAV of the World Trade Organization are slapped a tariff of 35 percent, while those bought into the country outside of the quota are levied a tariff of 50 percent.
The NFAC’s move comes ahead of the expected passage of a measure that would lift the quantitative restriction (QR) on rice and replace it with tariffs.
Piñol said the NFAC has decided to allow out-quota importation to ensure that the retail price of rice would remain affordable to Filipino consumers.
“Why would I wait for [the rice tariffication]? What if it would take longer? Then consumers would complain that rice prices are increasing,” he said.
According to Piñol, interested traders need to meet only three requirements approved by the NFAC—show proof of financial capacity, warehouse capability and retail capability.
“These will effectively weed out fly-by-night importers who just apply for import permit and sell them afterward,” he said.
“The feeling of the council is that the old system employed did not effectively reduce the price of rice because some import permits of farmers cooperatives are sold at about P100 per bag. And that effectively increases the price of rice by P2 per kilogram,” he added.
Piñol brushed aside fears that the NFAC decision to further open up the Philippine rice market would cause an influx in cheap imports and hurt local farmers.
“When importers feel that there’s so much rice stocks in the market, prices could go down and they will not make money,” he said. “It would be the market that will set the cap. The absorbtive capacity of the market would dictate it. No businessman in his right mind will import rice if he would not earn.”
The NFAC did not specify an end-date for the out-quota importation, so traders may import rice provided that they meet the requirements of the council and pay the tariffs.
Piñol said the Philippines will start 2019 with a buffer stock equivalent to 134 days of national consumption. He said his estimate does not include yet rice that will be brought into the country by the Department of Trade and Industry (DTI).
‘Enough rice’
The National Food Authority (NFA) on Wednesday said its warehouses in areas hit by Typhoon Samuel have enough rice.
NFA OIC-Administrator Tomas Escarez said he has already instructed the agency’s regional offices in the Visayas, Bicol region, Southern Luzon and Northern Mindanao to secure their stocks “in anticipation for rice distribution and relief operations during and after the storm.”
“NFA has at least 1.4 million bags of rice strategically stored in its different warehouses in Regions 4-8, Region 10 and Caraga. These regions are projected to be hit by Typhoon Samuel,” Escarez said in a statement on Wednesday.
“Our stocks will be available to local government units [LGUs] and other agencies for their relief operations during calamities,” he added.
The NFA said its concerned field offices have already activated their operation centers that would be open for 24 hours in preparation for the typhoon.
“The NFA has standing memorandum of agreements with relief agencies like the Department of Social Welfare and Development, Office of Civil Defense, as well as LGUs allowing them to withdraw rice on credit from the food agency for their relief operation anytime during calamities and emergencies,” Escarez said.