President Marcos approves rice tariff cut to 15 percent until 2028

MANILA, Philippines — To bring down the price of rice to P29 per kilo, President Marcos has lowered the tariff for imported rice until 2028, according to Socioeconomic Planning Secretary Arsenio Balisacan.

The National Economic and Development Authority (NEDA) Board, chaired by the President, approved the new Comprehensive Tariff Program for 2024-2028, which includes the reduction of rice tariff for both in- and out-quota rates from 35 to 15 percent.

At a Palace briefing yesterday, Balisacan said the newly approved tariff rates aim to ensure access and affordability to essential commodities while at the same time balancing the interest of consumers and local producers.

“The Department of Agriculture is aiming for a reduction (to) P29 per kilo, at least for the poor, because we will complement this tariff reduction with direct subsidies to the poor and the vulnerable, so they can access the food (rice),” Balisacan said.

“But overall, with the tariff reduced from 35 to 15 percent, everybody will benefit from that. This is crucial because world prices are still increasing,” he added.

Balisacan clarified that the lower rice tariff was aimed at bringing down the price of rice to P29 a kilo only for poor households, including beneficiaries of the government’s conditional cash transfer program or the Pantawid Pamilyang Pilipino Program (4Ps).

“Let me clarify, the P29 is the target cost of rice for the poor, those who are targeted for the 4Ps. So, it’s not a general price,” he said.

While reducing the rice tariff, Balisacan said the government would continue supporting domestic production through tariff cover as well as increased budgetary support to improve agricultural productivity.

He said the President would issue an executive order to implement the new tariff program.

As one of the most critical components of Filipino households’ consumption basket, rice contributed about two percentage points or over 50 percent to the country’s inflation in the past three months, Balisacan said.

At present, the average domestic retail price of regular-milled rice is P49 to P51 per kilo.

Marcos’ campaign promise was to reduce the price of rice to P20 a kilo.

Balisacan gave assurance that the lower rice tariff would not lower earnings for the government, but would increase economic activities.

“Because with the lower tariff that would enhance economic activities and improve the welfare of households, particularly the most vulnerable groups… it’s not actually a complete loss of revenue,” he said.

Balisacan said the government could still collect substantial import duty for the Rice Competitiveness Enhancement Fund (RCEF) despite the approval of the Comprehensive Tariff Program.

“The remaining tariff is still quite substantial, that is still 15 percent. So whatever imports, if those imports are coming in at still elevated high prices, it’s still quite a substantial tariff revenue for the RCEF,” he said.

Meanwhile, the NEDA Board retained the tariff cover for other agricultural products, including sugar and vegetables such as onion, garlic, broccoli, carrots, cabbage, lettuce, sweet potatoes, cassava, coffee substitutes, complete feeds and feed preparations. 

The board also approved a recommendation of the committee on tariff and related matters to reduce tariff on certain chemicals and coal briquettes to improve energy security and reduce input cost.

“Tariff reduction on coal will help ensure its availability at reasonable prices, thus supporting more stable electricity prices and supply in the country,” Balisacan said.

Rice production target

Meanwhile, the DA will not reduce its target of 20.44 million metric tons (MMT) of palay production this year despite the impact of the El Niño phenomenon.

DA Undersecretary Chris Morales said the agency is still aiming to achieve the record-high production this year.

Morales is in charge of the Masagana Rice Industry Development Program.

Last year, palay harvest reached a record high of 20.06 MMT with the help of government interventions.

The DA said the programs were primarily funded by tariff collected from imported rice as the Rice Tariffication Law sets aside P10 billion through the RCEF.

The RCEF aims to support programs that mechanize rice farming as well as provide farmers with good seeds and training on better farming technologies.

Other initiatives included the provision of hybrid seeds and the contract growing program of the National Irrigation Administration.

The DA is aiming to achieve rice self-sufficiency despite the growing population and additional rice demand due to the increasing number of tourists.

Morales said the rice supply situation is manageable with the continued importation of the private sector to augment domestic production. — Romina Cabrera, Louise Maureen Simeon