5 Senators ask Malacañang to withdraw EO 135 lowering tariff on rice

May 19, 2021

SENATORS Nancy Binay, Leila De Lima, Franklin Drilon, Risa Hontiveros, and Kiko Pangilinan urge Malacañang to withdraw Executive Order 135 lowering tariff on rice from 40 and 50 percent to 35 percent.

In Proposed Senate Resolution 726, they said there is “no reasonable and sufficient basis to reduce the tariff rates on rice and it will only cause more burden to our local rice farmers, further increase our import dependency, and cost the government millions in foregone revenues.”

The Senators cited farmers’ groups, the Tariff Commission, and the Philippine Statistics Authority’s reports as bases for their resolution.

The Federation of Free Farmers (FFF) questions the basis of lowering tariffs on rice mainly because Agriculture Secretary William Dar had previously stated that there is an ample supply of rice in the Philippines following a record harvest in 2020.

The FFF also said that the Philippines has been consistently importing from nine other countries, including the so-called most favored nations (MFN) of India and Pakistan, and more recently, China.

Aside from dependence on importation, the government can lose a significant amount of revenue with lowering rice tariffs.

According to the Tariff Commission, the Philippine government stands to lose at least 60 million pesos in revenue per year if the MFN tariff rates on rice are reduced to 35 percent. However, the FFF estimates that the lowered tariffs could cost the government around 548 million pesos in foregone revenue.

Lower tariffs means lower revenue collection and lower Rice Competitiveness Enhancement Fund (RCEF), effectively lowering appropriations for rice farmer financial assistance, titling of agricultural rice lands, expanded crop insurance program on rice, and/or crop diversification program under Republic Act 11203.

These programs depend on the excess of the 10-billion-peso tariff revenues collected from rice importation.

Pangilinan, who was former food security secretary and former head of the National Food Authority Council, is principal author of the resolution. He encourages Filipinos to buy local, especially agricultural products, to increase productivity and farmers’ incomes.

“Bilhin natin ang bigas ng PIlipinas, bilhin natin ang baboy ng ating mga local hog raisers dahil ‘pag kumikita sila, gaganahan sila magtanim, dadami ang supply sa merkado at bababa ang presyo para sa lahat,” he said.