By Tracy Cabrera
Due to low production, the country has been importing rice to address the shortage in supplies. (Photo credits: Interaksyon)
MANILA — Amidst the clamor by consumer groups to temporarily suspend the Rice Tariffication Law (RTL), former Bangko Sentral ng Pilipinas governor and concurrent finance secretary Benjamin Diokno has recommended to President Ferdinand ‘Bongbong’ Marcos, Jr. to continue the implementation of the RTL as its suspension would only aggravate the present predicament the country is in.
“(The RTL) really is a good law. It has a major contribution to our desire to control inflation, so I think it’s not smart to go back to the old system,” Diokno argued to give credence to the benefits obtained through the law.
The measure, enacted as Republic Act No. 11203 on February 14, 2019, lifted the quantitative restriction on rice imports and imposed a minimum of 35 percent tariff on imported rice, effectively opening the Philippine rice market.
The price of rice, however, has remained relatively low but predictable even during the height of the ongoing coronavirus pandemic due in large part to the RTL.
“On average, today’s Filipino consumer enjoys a price reduction of 7 pesos per kilo of rice compared to its peak in 2018. Households also now have a variety of choices under a liberalized rice trading regime,” the finance chief pointed out.
He explained that prior to the liberalization of the rice sector, rice was a major source of inflation but following the enactment of the RTL in 2019, the contribution of rice to inflation dwindled down to negative levels significantly.
“In January 2019, when inflation was at 4.4 percent, the contribution of rice to inflation was 0.6 percentage points (ppt). By contrast, in January 2020, when the inflation rate was at 3.0 percent and with the RTL already in effect, the contribution of rice to inflation dropped to -0.8 ppt,” Diokno further said.
“The effects of the RTL continue to be felt. In June 2022, when overall inflation hit 6.1 percent, the contribution of rice to inflation was only 0.18 ppt. Clearly, due to the RTL, rice prices have remained stable,” he added.
Under the RTL, tariffs collected from rice imports are reinvested back into the local rice industry through the annual P10-billion Rice Competitiveness Enhancement Fund (RCEF). The fund earmarks resources for the modernization of the agriculture sector and provides farmers with greater direct access to credit, high-quality seeds, agricultural machinery, and skills training on modern farming technologies. (ai/mtvn)