A MONTH ago, President Marcos Jr. issued Executive Order 62 reducing the tariff on rice and other products to 15 percent from 35 percent, a move that would ease the entry of imported rice and ensure the availability of the stock in the market. In theory, this should stabilize and even lower the market price of the staple grain.
In his order, the President said, “The implementation of an updated comprehensive tariff schedule aims to augment supply, manage prices, and temper inflationary pressure of various commodities, consistent with the Philippine national interest and the objective of safeguarding the purchasing power of Filipinos.”
While EO 62 is still being challenged in the Supreme Court by various agri groups and farmers through a petition for certiorari, the government is ready to implement it in the absence of a temporary restraining order from the High Tribunal. This is the position taken by Solicitor General Menardo Guevarra.
‘However, scaling up importation of rice to boost its supply and thus attain stability in prices is at best a temporary solution.’
The Supreme Court has ordered the respondents in the case – President Marcos, Executive Secretary Lucas Bersamin, National Economic and Development Authority (Neda) Secretary Arsenio Balisacan, and Tariff Commission chair Marilou Mendoza – to file their comments within a non-extendible period of 10 days.
With the implementation of EO 62 under way, Finance Secretary Ralph Recto said Filipinos would start to feel the impact of the order in August as average price of rice could go down to P50 per kilogram from P54.50 per kilo this month.
“Had we not taken this step, rice prices would have remained above P50, causing significant pain for consumers,” Recto said. “A sustained high price of rice could continue to drive inflation, delaying the reduction of policy interest rates by the BSP and derailing the country’s economic growth trajectory.”
Critics, however, have maintained that reducing the tariff rate on rice is not a panacea to the problem of high prices. Thus, the government has launched a nationwide rice price monitoring to assess the impact of the rice tariff reduction across the entire supply chain, from importers to retailers.
The extensive price monitoring initiative will be done by the Department of Trade and Industry, in cooperation with the Department of Agriculture, and this will cover a wide range of retail markets, including supermarkets, hypermarkets, and grocery stores under the DTI’s jurisdiction, as well as wet markets under the DA’s purview.
Trade Secretary Alfredo Pascual, who also chairs the National Price Coordinating Council (NPCC), said his department would remain steadfast in the rigorous monitoring and analysis of rice price fluctuations. He added that the data-driven reports will inform policymakers’ decisions to ensure stable rice supply, distribution, and pricing.
The NPCC plays a crucial role in coordinating national efforts to stabilize and control the prices of essential goods and prime commodities. The council is composed of the secretaries of the trade and agriculture departments, as well as representatives of the consumer, agricultural, trading, and manufacturing sectors.
Food security, which is a principal objective of the Marcos administration, is best served when several government agencies cooperate and align their efforts towards shielding Filipinos from high food prices which, after all, have the biggest impact on inflation. Inflation rate also dictates the policy stance of the Bangko Sentral ng Pilipinas, which affects other economic activities like investments, lending, and hiring.
A strict and extensive monitoring of price movements will enable the government to take the correct and timely measures as it intervenes in the rice market. However, scaling up importation of rice to boost its supply and thus attain stability in prices is at best a temporary solution. There is nothing better than ramping up production and increasing productivity of our rice farms so that we won’t need to import this staple food, just as we were doing some 50 years ago.
