WHILE the Philippines is set to give up its privilege to regulate the entry of imported rice through the quantitative restriction (QR) scheme, Manila will still use its flexibility under the World Trade Organization (WTO) to impose higher tariff rates on a seasonal basis to protect local farmers from import surge, Finance Secretary Carlos G. Dominguez III said on Thursday.
“One idea is that [we slap] low tariff rates during the lean months and high tariff rates during harvest season. Under that, maybe [we can impose] 35 percent during the lean months and 50 percent during harvest season,” Dominguez told Palace reporters.
Agriculture Undersecretary for Policy and Planning Segfredo R. Serrano said rice is not included in the commodities that have bound rates under the WTO multilateral trading system. This, Serrano said, means that the Philippines can slap any duty on rice, depending on what Congress will pass.
In a news briefing on Thursday, Dominguez said economic managers are still deciding on the tariff rate to be slapped on rice imports, following the expiry of the country’s rice-import cap. However, what is certain is that it will be between 35 percent and 50 percent, Dominguez said. “I think what’s being discussed is something like 35 percent or 50 percent. [It’s] around that range,” Dominguez said.
The finance chief added economic managers are “thinking about a number of things” to ensure they cover all possible options on resolving the matter. Dominguez said they are open to the idea of a season-based tariff rate for rice imports.
Dominguez said this might be the best way to balance the interest of local farmers and consumers. “[As much as] we have to protect the local farmers from [the] dumping of foods, we also have to protect the consumers and hope the prices [of rice] will be moderate,” the finance chief said.
Fact is, Dominguez added, prices of local rice are higher than those of imported rice, especially if the staple is produced by a fellow Asean nation. In a 2015 study commissioned by the Department of Agriculture (DA), it was found out Thailand and Vietnam have the lowest production cost of a kilo of rice.
Thailand spent P9.12 to produce a kilo of rice, while Vietnam recorded the lowest cost at P6.69. On the other hand, the Philippines needed P10.03 to produce a kilo of rice. In an earlier interview with the BusinessMirror, Trade Secretary Ramon M. Lopez said the Committee on Tariff and Related Matters (CTRM) is just awaiting the recommendation of the DA on the tariff rate to be slapped on rice imports. “We are still awaiting the recommendation of the DA chief [because] that should come from him, [so] for now, it stays at 35 percent,” Lopez said.
Lopez added the CTRM will only get to discuss the tariff rate to be imposed on rice imports in their next meeting. Dominguez said the CTRM is scheduled to convene “in the next couple of weeks”.
The Philippines’s waiver on the special treatment for rice lapsed last Friday. However, Manila in April informed the WTO it was not able to convert its QR on rice into tariff, citing delays in the amendment of Republic Act (RA) 8178, or the Agricultural Tarrification Act.
Amending RA 8178, according to agriculture officials, is necessary in order to convert the QR on rice into tariff because under the law, rice is the only agriculture commodity with an import cap and it did not specify a termination date for it. Without the amendment, the Philippines has to enforce reduced rates on agricultural goods covered by the Philippines’s tariff commitments to the WTO.
President Duterte in May issued Executive Order 23, extending for another three years concessionary rates for certain agricultural imports.