MANILA, Philippines — The Philippines is once again setting record levels in terms of buying rice in the world market as it is expected to be the second-largest global importer this year at 2.6 million metric tons (MMT) of rice.
After the 2008 rice crisis, the Philippines is now seen sourcing some 2.6 million MT after the removal of quantitative restrictions on Filipinos’ basic commodity.
This makes the country the second-largest rice importer for 2019, next to China with an estimated 4.5 million MT of rice imports.
In the latest report of the United States Department of Agriculture-Foreign Agricultural Service (USDA-FAS), this year’s importation is 37 percent higher than the 1.9 million MT imports in 2018.
Just last week, Republic Act 11203 or the Rice Import Liberalization Law took effect, which replaced rice import quantitative restrictions with tariffs and reverted the Minimum Access Volume to its 2012 levels.
Rice is a staple food in the country and the law is intended, in part, to spur imports in order to quell domestic unrest caused by inflation.
“As a result of this legislation, higher rice imports are expected from nearby ASEAN member countries, with their relative low cost and preferential access to the Philippines,” the USDA said.
“This is a record not seen since the international price spike in 2008 and would make the Philippines the second-largest global importer in 2019,” the report added.
Given the high non-most favored nation (MFN) tariff rate and in the absence of a free trade agreement, it is not anticipated that the US or other countries will be competitive enough to pick up much of the expanded volume of Philippine imports.
The USDA already hiked this year’s rice imports from the earlier projection of 2.3 million MT following the lifting of the quantitative restriction on the commodity.
Agriculture Secretary Emmanuel Piñol, for his part, said the huge volume of importation is only temporary and will eventually slowdown.
“Ironically, we are also expecting a higher local harvest this year. I believe that when the market chokes, the inflow of imported rice will naturally slow down,” Piñol told The STAR.
“This is just for now because everybody is excited to import. With the price of local palay dropping to as low as P16 [per kilo], local rice prices could go as low as P36. That would be competitive with the imported rice,” he said.
In fact, application to bring in the commodity even before the law took effect already reached nearly two million MT.
The country’s additional imports also aim to strengthen buffer stocks ahead of the midterm elections scheduled in May 2019.
Rice consumption has also been raised to 13.75 million MT from 13.65 million MT as rising food prices are forcing less affluent Filipinos to consume more rice and less meat and vegetables.
Production of milled-rice this year is seen decreasing by one percent to 12.15 million MT from the 12.23 million MT in 2018.
USDA said there may be slight reduction in area planted as rice areas in 2019 will be at 4.81 million hectares, one percent lower than the 4.84 million hectares last year.