‘Poor to gain more from making rice cheaper via scrapping of QR’

Converting the quantitative restriction (QR) on rice into tariffs would benefit the poor more than increasing the cash subsidies given to them, an official of the Department of Finance (DOF) said on Thursday.

In a news briefing in Malacañang, Finance Undersecretary Karl Kendrick T. Chua also told reporters more Filipinos would benefit from the conversion of the QR on rice.

“The government’s plan is to reduce the price [of rice] so that everyone would benefit. Because if you will give a subsidy, that means the government is taking it from the budget,” Chua said.

Aside from making rice cheaper, the DOF official said converting rice-import caps will also help the government increase its tax collection. Citing the National Economic and Development Authority’s (Neda) estimate, Chua noted that scrapping the QR would slash the price of rice by P7 per kilogram.

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He added there are other ways to help the poor in case inflation accelerates, such as the provision of conditional-cash transfer (CCT) and the unconditional-cash transfer (UCT).

A total of 7.4 million families will receive a cash subsidy of P200 per month to help them cope with the increase in commodity prices following the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law.

Amounting to P2,400 for the whole year, the UCT will be distributed within the first quarter to 4.4 million existing beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps) and to 3 million indigent senior citizens.

The UCT is different from the CCT because it requires children of the beneficiaries to continue attending school to undergo regular check-ups.

Chua said 4P beneficiaries have started to receive the conditional cash transfers, adding that the Department of Social Welfare and Development distributes the UCT together with the 4P subsidy.

In an economic bulletin on the rice-sector reform, Finance Undersecretary and chief economist Gil S. Beltran said the conversion of the QR would encourage more private traders to import the staple.

Citing a Neda study, Beltran said the reduction in rice prices would be beneficial to the majority of households spending at least 20 percent of their income on rice.

The DOF’s chief economist added  reducing rice prices would also help the government cut poverty as the staple is a major driver of inflation.

The first package of the TRAIN, which was implemented in January, lowered income tax rates but hiked the excise tax of fuel products, sweetened beverages and brand new vehicles.

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Turning Points 2018