The National Food Authority Council (NFAC) is standing by its decision to not import rice, as the country has sufficient stocks, according to one of its members, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo.
In a recent interview with Guinigundo, the BSP official said Filipinos need not worry about spikes in the price of rice because the country will have enough stocks due to better harvest.
“[The] expectation is better harvest so [this will add to the buffer stock]. If we import now, prices will fall because [we] still have rice stocks of up to 70 days, which is even higher than last year’s 69 days,” he said.
He said the price-monitoring report showed that well- and regular-milled rice have been declining by five to 10 centavos, or even lower, on a weekly basis.
This means, Guinigundo said, that government-to-government importation of rice will be a “last resort” for the Philippines.
The BSP official said this will prevent the National Food Authority (NFA) from incurring more debt. Currently, the NFA has a standby authority from the NFAC to import 250,000 metric tons (MT) of rice.
If this option is taken up by the government, should there be a shortage caused by natural calamities or similar events, this will automatically cost the already heavily indebted NFA to incur an additional P24 billion in debt.
“If the buffer stock will not be enough based on the monitoring, that’s the time to activate the 250,000 MT standby authority from the council.
This is the last resort [because] the government pays for this. Where does the government get the money for this? We borrow,” Guinigundo said.
He said the private sector should be allowed to import rice, especially now that its waiver relating to the special treatment for rice will expire on June 30. This means that imported rice can freely enter the Philippines starting July. However, the Philippine government has yet to determine the tariff rate for rice and amend Republic Act (RA) 8178, which allowed quotas on rice imports.
Despite the potential problems which could be created by this, Finance Secretary Carlos G. Dominguez III said he is confident that the country can afford to engage in any legal action filed against it at the World Trade Organization’s (WTO) Dispute Settlement Body (DSB).
“There’s so many ifs there. But the policy direction is let the market operate normally and to, again, separate the regulatory function, the buffer stocking function from the NFA. To just put things in the right place so that they won’t come up with a potentially schizophrenic organization,” Dominguez said.
Earlier, trade experts and the National Economic and Development Authority (Neda) expressed concern that the failure to amend RA 8178 under a post-quantitative restriction (QR) on rice scenario could open the country to WTO sanctions.
Former Tariff Commissioner George Manzano told the BusinessMirror that sanctions can be imposed if the WTO receives valid complaints regarding the entry of rice imports to the Philippines. Sanctions from the WTO could mean trade partners asking for concessions, such as lower tariffs on specific goods or nondelivery on the trade pacts.
It could also mean allowing the entry of greater dairy and livestock imports. The presence of these concessions was used by the economic managers to prevent the extension of the QR.