National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan defended the government’s decision to implement a tariff rate cut on rice imports, as he highlighted the impact of increasing world prices on the domestic market.
Balisacan told reporters on the sidelines of an event in Quezon City yesterday the increasing price of rice is a serious problem, with rice inflation at over 20 percent over the past couple of months.
“It’s a big concern, almost one half of the headline inflation is attributable to rice. The issue is that world price for rice has been rising, since July of last year, and until now it is rising, and will reflect on our local markets,” Balisacan said.
“Obviously, if you reduce the tariff while world prices are going up, that will dampen the effects of world rice price increases on our local markets,” he added.
The NEDA Board earlier agreed to reduce the duty rate to 15 percent for both in-quota and out-quota rates from 35 percent until 2028, with the aim to lower the price of rice further and make it more affordable.
According to some forecasts, world rice prices could taper around the second half of September or October, Balisacan said.
“But it’s so uncertain. All the commodities are going down, but the price of rice is going up. So how can you not reduce?” Balisacan said.
“You have to temper it. Otherwise, you’re so very irresponsible. How can you not do something? And the reduction of the tariff is the… most economists around the world will… recommend in this kind of situation. You cannot let prices sharply fluctuate. Because, otherwise, you cannot make good plans for investment. And it impacts on the poor most severely,” he added.
Balisacan said even at the reduced rate of 15 percent, the rice sector continues to enjoy comparatively high tariff protection from competitive imports as the tariff is higher than for the 90 percent of the total 11,484 tariff lines under the Asean Harmonized Tariff Nomenclature 2022.
“It’s the decision of the NEDA Board… to address not only the high prices of food… rice, but also to… address the inflation. Food inflation in general… and the effects of that on the economy,” Balisacan said.
“It’s a balancing act. Balancing the interest of producers, consumers and the economy. It’s a very delicate balancing act. At the same time, we also know that our farmers are also very much challenged,” he added.
The NEDA chief said the government has been prioritizing the agriculture sector, citing as an example the Department of Agriculture’s budget that increased by 69 percent during the two years of the current administration, compared to the average in the last few years of the previous administration.
“The focus there is increasing productivity. That will mean we address the lack of irrigation development issues, the logistics issues, the marketing distribution issues, the access to seeds, access to planting materials, the access to fertilizers. That is where the government’s support is focused on,” the NEDA chief said.
“And the intention is to raise the productivity because the only way you can improve the welfare of our farmers on a sustained basis is increase their productivity so that they are able to get more incomes, more profits from whatever small piece of land they have. So that is the priority of the government,” he added.
Balisacan also addressed calls of various stakeholders for his resignation.
“With regard to the issue of my resignation, of course our President can choose wh(o)ever he prefers to be his Cabinet member, it’s up to the President. If the President finds a better person to run NEDA, I’ll be happy to accept that because all we care about is the country. I want to see this country develop and join our neighbors. So if there is any other better people out there to run, I would want those people to take over, to take government,” Balisacan said.
