CHANGES to the concessionary tariff rate for mechanically deboned meat (MDM) granted by the Philippines in exchange for retaining its quantitative restriction (QR) on rice will not be automatic once the President signs into law the rice tariffication bill.
Government sources familiar with the matter told the BusinessMirror that there is a 45-day window before any increase or decrease in concessionary tariff rate for MDM is implemented, as indicated in the proposed implementing rules and regulations (IRR) of the rice tariffication bill.
The 45-day period, which will take effect right after the tariffication bill is signed into law, is also being seen as a period when a corresponding executive order (EO) on the MDM tariff can be issued.
The Tariff Commission has been tasked to conduct a study on the “most optimal” tariff rate and timetable for the implementation of the tariff rates for MDM.
In a public hearing in September, Tariff Commission Chairman Marilou P. Mendoza said the agency will need a month to investigate and evaluate the position papers submitted by industry groups.
However, if the Committee on Tariff and Related Matters (CTRM) decides to retain the existing MFN rate for MDM, the President must immediately issue an executive order that will amend EO 23.
If this is not done before the QR is converted into tariffs, Mendoza said the provisions of EO 23 pertaining to MDM will automatically take effect.
A month before the expiry of the country’s rice-import cap, the President signed EO 23 to extend the validity of the MFN tariff rates on agricultural products under Republic Act (RA) 10863, or the Customs Modernization and Tariff Act.
The EO retained the 5-percent tariff on MDM. This rate would revert to its 2012 level of 40 percent once the rice is lifted, or by January 1, 2021, whichever comes first.
In a statement on Wednesday, the National Economic and Development Authority (Neda) reiterated its position that enactment of the rice tariffication bill will help stabilize food prices and temper inflation.
The bill, ratified by both chambers of Congress on November 28, is set to be transmitted to Malacañang for the President’s signature.
“The aim of the bill is to make rice accessible and affordable to every Filipino, and to make the rice sector competitive,” Pernia said.
Apart from the reduction in rice prices, the Neda said the bill empowers the President, for a limited period and for a specified volume, to allow the importation of rice at lower rates for the benefit of consumers in the event of a shortage.
Pernia urged the Department of Agriculture (DA) and the Department of Trade and Industry, as well as other concerned agencies, to carry out information dissemination campaigns on the new rice importation regime and ensure that traders are ready to participate when the bill is enacted into law.
“Increasing the number of market players and competition in the rice sector are critical for the bill to deliver on its promise of lower rice prices for everyone,” Pernia said. The rice tariffication bill amends the two-decade-old RA 8178, otherwise known as the Agricultural Tariffication Act of 1996, and replaces the QR on rice imports with tariff.
The proposed law also provides for the establishment of the Rice Competitiveness Enhancement Fund (RCEF) consisting of tariff revenues. A portion of the rice tariff revenues in excess of P10 billion will be used to provide direct financial assistance to rice farmers.
The DA, Pernia said, will also have an additional source of funding for its programs and projects to increase the productivity and enhance the competitiveness of the sector.
Key interventions to be financed by the RCEF include farm machinery and equipment to improve farm mechanization, rice seed development, propagation and promotion, expanded rice credit, crop diversification and extension services. The rice tariffication bill provides safety nets to the rice sector as it grants the President emergency power to increase, reduce or adjust existing tariff rates to safeguard Filipino farmers.
The bill also provides the imposition of a special safeguard duty on rice in case of extreme or sudden price fluctuations in accordance with RA 8800, or the Safeguard Measures Act.
Image credits: Roy Domingo