Rice Bags in a Warehouse of the National Food Authority
(File photo by JOAN BONDOC / Philippine Daily Inquirer)
MANILA, Philippines — In a move to align with market-oriented reforms and prioritize consumer welfare, the Department of Finance (DOF) has proposed a temporary reduction of import tariffs on rice. This proposal comes amidst the imposition of price caps on rice, which has been criticized for contradicting basic economic principles.
Finance Secretary Benjamin Diokno emphasized the importance of adopting a comprehensive approach to ensure sufficient rice supply at reduced prices, even with the implementation of price controls. Diokno suggested that President Marcos may have implemented Executive Order No. 39 on August 31, which established a price ceiling of P41 per kilo for regular-milled rice and P45 for well-milled rice, due to the misbehavior of market players.
According to Diokno, some industry players have been profiting through speculation, not just with rice but also with other agricultural commodities such as onions and tomatoes. In order to address the surge in rice prices, the DOF is proposing a temporary reduction of the 35-percent rice import tariff rates to 0 percent or a maximum of 10 percent.
This proposal echoes the call made by the Foundation for Economic Freedom (FEF) for a temporary lifting or reduction of import levies as an alternative to price caps. However, unlike the FEF, both Diokno and the National Economic and Development Authority (Neda) support the implementation of EO 39 as a means to immediately reduce rice prices.
In a statement released on September 3, Neda expressed confidence that the price ceiling is only a temporary measure. During a briefing with journalists, Diokno also proposed that the government incentivize the timely importation of rice by the private sector and fully implement the Super Green Lane. The Super Green Lane allows for the advance processing and clearance of shipments from the country’s most qualified importers through the use of Electronic Data Interchange.
Furthermore, the DOF suggests working with tollway concessionaires and operators to temporarily exempt trucks transporting agricultural goods from toll fee increases. The finance chief emphasized the need to address noncompetitive behavior in the rice industry by cracking down on hoarding, smuggling, and economic sabotage. He also urged strict monitoring of imported rice prices in the logistics chain and encouraged retailers and the public to report any violations of price caps on rice.
Diokno recognized the importance of protecting the vulnerable sector and proposed safeguarding farmers from the impact of price ceilings. He also proposed targeted subsidies for small traders and retailers of rice, as well as support for low-income households to mitigate the effects of the surge in rice prices.
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