MANILA, Philippines — A spike in global rice prices countered a drop in the volume of imported rice, benefiting state coffers with bigger revenues from tariffs on the main staple, the Bureau of Customs reported on Friday.
A total of P10.73 billion was raised from rice tariffs as of July 17, up 7.9% year-on-year from P9.94 billion.
The amount collected already surpassed the P10 billion mandated to be allocated to the Rice Competitiveness Enhancement Fund (RCEF), a pooled funding under Republic Act 11203 or the Rice Tariffication Law earmarked for projects targeted at improving local rice production.
Under the law, the government is allowed to redirect in other farm programs any windfall revenues from rice levies during the first six years of the law enacted last year. On the measure’s first year, part of the P12.3 billion generated under RCEF went to fund cash transfers to poor farmers.
Collections rose despite a 24.6% drop in the volume of imported rice so far this year. Lockdowns from mid-March to June have crippled trade activity and put imports almost to a standstill, but the agency said higher global rice prices worked on its favor.
“The (Customs) consistently conducts close monitoring of the declared value on rice importations in view of its strict adherence to global published prices for rice which serves as a guide when the veracity of the declared values is under dispute,” Customs said.
Indeed, data from Food and Agriculture Organization, a UN agency, showed its global rice price index up 14% year-on-year in June. Broken down, FAO data showed grain prices have surged in Thailand and Vietnam, where the Philippines secures the bulk of its imports, since December last year.
With higher rice prices, the base over which the 35% tariff is collected also increases, pushing up revenues computed from the levies.
“The increase in rice tariff collection can be attributed to the (Customs’) continuous effort to protect government revenue and ensure correct valuation of goods,” the agency said.
Sought for comment, Agriculture Assistant Secretary Noel Reyes said by phone the department would give an update on RCEF was spent so far this year over the weekend. The last update was in February, before the pandemic struck, when the agency said P1.52 billion was already disbursed.
By law, the P10-billion rice fund should be divided to four key farm programs. The bulk of funding worth P5 billion is allocated to farm machinery, while P3 billion is spent to purchase farm seeds.
The balance of P2 billion is equally shared between bank credit for agriculture lending, and so-called “rice extension service” to farmers.
According to the agriculture department website, 57 provinces nationwide benefit from RCEF.