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April 21, 2024

Liberalized rice trading cuts price of staple food for Filipinos by 15%

The Department of Finance (DOF) said the liberalization of rice imports has helped slashed the prices of the country’s staple food by 15.2 percent to P39 per kilogram from P46 per kilogram.

Finance Secretary Carlos Dominguez III said that the passage and implementation since 2019 of the Rice Tariffication Law (RTL) or Republic Act 11203 helped lower the price of rice from a peak of P46 per kilo in 2018

“The Rice Tariffication Law was finally achieved after more than thirty years of failed attempts under previous administrations. The law opened up the Philippine rice market and, in turn, reduced the price of our country’s staple food for more than 100 million Filipinos,” Dominguez said.

Freed from local entrenched interests that took advantage of the protectionist policy on rice for decades, this staple food is now more affordable, especially for low-income Filipinos who spend about 16 percent of their total household budget on rice.

As a result of this reform, which he first proposed three decades ago when he was Agriculture Secretary, rice is no longer a main contributor to inflation, Dominguez said.

“It took the strong political will of the President for rice tariffication to finally happen for the benefit of our consumers,” Dominguez added.

With rice made affordable through the RTL, the National Economic and Development Authority (NEDA) estimates that three years from now, the proportion of malnourished children and population at risk of hunger in the country would be reduced by 2.8 percent and 15.4 percent, respectively.

These estimates are equivalent to around 2.1 million less people at risk of hunger and malnutrition, the NEDA said.

Another key benefit of RTL is the flow of billions of pesos in funds to the agriculture sector through the creation of the P10-billion Rice Competitiveness Enhancement Fund (RCEF), which is used exclusively to finance programs that will sharpen the competitiveness of palay growers by way of providing them with easy access to fertilizer, farm machinery and equipment, high-yield seeds and cheap credit; and offering them skills training programs on farm mechanization and modern farming techniques.

In the first four months of 2022, the Bureau of Customs (BOC) already collected P6.6 billion in duties from rice imports, which is already two-thirds of the P10 billion earmarked annually for RCEF.