Finance Secretary Benjamin Diokno is set to ask President Ferdinand “Bongbong” Marcos Jr. to continue the implementation of the Rice Tariffication Law (RTL).
“[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 said.
The measure, enacted as Republic Act 11203 in February 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 has remained low and predictable even during the height of the COVID-19 pandemic, due in large part to the RTL.
On average, today’s Filipino consumer enjoys a price reduction of P7 per kilo of rice compared to its peak in 2018. Households also now have a variety of choices under a liberalized rice trading regime.
Prior to the liberalization of the rice sector, Diokno said rice was a major source of inflation.
Following the enactment of the RTL in 2019, the contribution of rice to inflation dwindled down to negative levels.
In January 2019, when inflation was at 4.4 percent, the contribution of rice to inflation was 0.6 percentage point. By contrast, in January 2020, when the inflation rate was at three percent and with the RTL already in effect, the contribution of rice to inflation dropped to -0.8 percentage point.
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 percentage point.
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.
Rice farmers also received P8.2 billion direct and unconditional cash aid from the 2019 to 2021 rice tariff collections in excess of P10 billion under the Rice Farmers Financial Assistance (RFFA) program.