The Rice Tariffication Law (RTL) is expected to accelerate agricultural growth and facilitate the structural transformation of the economy, with gross domestic product (GDP) increasing by at least 0.13 percentage points in 2025, the National Economic and Development Authority (NEDA) said.
Karl Kendrick Chua, NEDA acting secretary, said during a virtual briefing yesterday that the said estimate is based on a study by NEDA and the International Food Policy Research Institute.
“More importantly, they estimate that RTL would reduce the proportion of malnourished children and population at risk of hunger in the country by 2.8 percent and 15.4 percent, respectively, by 2025,” Chua said.
Chua said taken together, these are equivalent to around 2.1 million less people at risk of hunger and malnutrition.
The NEDA chief said as the country continues to implement this reform, poverty incidence is expected to be reduced by 1.2 percentage points, since majority of households, including those of rice farmers, are net buyers of rice.
“As we wait to realize these long-term gains, we encourage everyone in the rice sector to cooperate and give information to our implementing and law enforcement agencies regarding uncompetitive trade practices of private traders,” Chua said.
“We all need to work together on this issue. Like any investment, let’s give the law some time. Let us work together in overcoming the challenges of the rice industry,” he added.
Chua said while the government recognizes the shocks from the initial implementation, he believes that this should not be taken as an indication of the eventual impact of the law.
He said in anticipation of the possibly adverse but short-term effects of this reform, the government has provided safeguards to protect rice farmers during the transition period.
“Thus, the RTL came with the Rice Competitiveness Enhancement Fund with a guaranteed budget of P10 billion per year for six years, or a total of P60 billion at least. Higher tariff collection beyond P10 billion in 2019 means that farmers are getting even more,” Chua said.
Antonio Joselito Lambino, Department of Finance assistant secretary, said during the same event that in 2019, the tariffs collected reached P12.1 billion.
The excess revenue of P2.1 billion was placed under the Crop Diversification Program and Expanded Crop Insurance Program.
“For the first half of the year, more than P10 billion in rice tariffs have been collected, that’s why we are sure that we will be able to fund RCEF programs for our farmers,” Lambino said.
Chua also said the RTL is one of the country’s insurance against this coronavirus disease 2019 pandemic.
“With the enhanced community quarantine (ECQ) shutting down 75 percent of the economy and affecting jobs and income in a massive way, lower rice prices have helped low income families cope, tempering the rise in hunger and malnutrition,” Chua said.
“Without RTL during ECQ, it would have been much worse,” he added.
Lambino said the Bureau of Customs has adopted measures to correct and monitor the valuation of rice imports.
“From March to June 2019, we have placed under audit 60 rice importers that had the most customs violations. It was discovered that there is P1.4 billion in customs duties, surcharges, penalties, and interest that need to be paid because of these customs violations,” Lambino said.