PH to compensate for extension of QR on rice imports, says Neda chief

By: Ben O. de Vera, Philippine Daily Inquirer, Jul 13, 2017

Economic managers will ask President Duterte to certify as urgent a bill that will slap tariff on all rice imports to enable the country to finally do away with the quota system and avoid sanctions from the World Trade Organization (WTO).

While the President signed in April Executive Order No. 23, which was aimed at eventually lifting the quantitative restriction (QR) on rice, the EO provided for a three-year extension of the QR while in transition toward the imposition of tariff, Socioeconomic Planning Secretary Ernesto M. Pernia told reporters on Monday.

To ultimately remove the QR, the over one-decade-old Republic Act No. 8178 or the Agricultural Tariffication Act of 1996, which had put the rice import quota in place, must be amended.

Pernia, who also heads state planning agency National Economic and Development Authority (Neda), said Senator Ralph Recto had already filed in the Senate a measure to remove the QRs.

“In the meantime, as the deliberations in Congress will take some time, what we are trying to do is to not infuriate the members of the WTO,” Pernia said.

Specifically, Pernia said “we are planning to extend the concessions on lower tariffs to certain products or minimum access volume of 5,200 metric tons that will be granted to interested WTO parties up to June 2020 or up to the time Congress approves the official lifting of QR and replacing them with tariffication, whichever comes first.”

The concessions will be on agricultural products, Pernia said.

He said he was hopeful “the approval of the tariffication proposal will come sooner so that we don’t have to be extending concessions.”

Pernia said Neda was backing the proposal of state-run think tank Philippine Institute of Development Studies to set the import duty on rice at 35 percent.

In 2014, the WTO allowed the Philippines to extend its QR on rice until June 30, 2017, to give local farmers more time to prepare for free trade in light of the government’s goal of achieving rice self-sufficiency.

Since the government imposes a quota on rice imports, domestic prices are vulnerable to shocks resulting from meager supply.

The QR puts the burden of rice supply and demand to the government, and market forces are being limited by the quota system.

Sources say importation should be done by the private sector in order to allow market forces to determine prices.

The extended QR slaps a 35 percent duty on imported rice under the minimum access volume (MAV) of 805,200 metric tons. Importation outside of the MAV limit are levied a higher tariff of 50 percent.

The Philippines’ most favored nation rate—the additional tariff imposed on imports from outside of the Asean—on the commodity remains at about 40 percent.

In 1995, the WTO allowed the Philippines to impose a 10-year quota system for rice importation. The QR was extended in 2004 and, again, in 2014.