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STRONG
doubts have been raised on the proposal extending the
private sector twice as much rice quota as before in
order to address the perceived problem of inadequate
supply of rice in the country, Finance Secretary
Margarito Teves said Thursday.
In an
interview at the Mandarin Oriental Hotel, Teves said the
government is not convinced that elevated rice prices
should come down the minute the private sector is
allowed to import 600 metric tons of rice as soon as
possible, instead of the usual 300 metric tons the
industry had been allowed to import in the past.
The
doubling of the rice quotas to 600 metric tons was based
on a zero-percent tariff rate, but even under this
condition the price of the staple was not seen to
improve or stabilize.
Teves
said the rice importers were not seen as able to sell
the zero-tariff rice at the prevailing P35-a-kilo market
at present, simply because people would be unable to pay
for it at this price. “If the importers anticipate not
being able to sell at this price, there is no point
making the importation at all,” he said.
Teves
said it remains a big question whether or not the
zero-rated rice would fly off the shelves at P34 or even
P36 a kilo.
The
Philippines requires the importation of some 2.7 million
metric tons of rice this year to stabilize supply and
keep prices stable.
Some in
government believe the doubling of rice quotas to 600
million or even 700 million metric tons should do the
trick, but that no one is really sure of it, he said.
Teves
also said it was the World Bank that recommended the
reduction of tariff to 20 percent or 30 percent from the
current 50 percent.
He
revealed the government can absorb a tariff cut of up to
12 percent, but that any more should be ruinous.
At this
level, the tax expenditure subsidy of P7.5 billion
assumed in the collection goal of the Bureau of Customs
this year would be eroded completely, according to Teves.
In any
case, Teves was unsure the tariff-rate cut would have an
immediate impact on prices given that rice farmers first
have to be consulted as part of the discussion process.
“The
period of consultation could be extended and therefore
[is] not conducive to the immediate need to bring down
price pressures on rice,” he said. |
