The umbrella organization of city mayors across the country has commended Secretary Carlos Dominguez III, the Department of Finance (DOF) and the rest of President Duterte’s economic team for pushing the enactment of the law liberalizing rice imports, which has led to lower prices of the staple food and a corresponding significant decline in the country’s inflation rate.
In a manifesto, the League of Cities of the Philippines (LCP) said that since Republic Act 11203 or the Rice Liberalization Law took effect last March, the average retail cost of rice has dropped by at least P7 per kilo or 20 percent less than last year’s peak rates.
The LCP cited, in particular, Dominguez’s efforts “for pushing the approval and enactment of RA 11203….”
“We in the League of Cities of the Philippines have seen the huge benefit of this law to our respective constituencies who now enjoy more affordable prices of rice,” the LCP said in the manifesto signed by the organization’s national chairman, Cebu City Mayor Edgardo Labella.
The LCP also pointed out that as a result of the law’s implementation, the country’s inflation rate has also fallen significantly last June, “from a high of 6.7 percent in September and October 2018.” The June 2019 headline inflation rate fell to 2.7 percent. It further decelerated to 2.4 percent in July.
“In this regard, the efforts of Secretary Dominguez, the Department of Finance, and the rest of the country’s economic team should not go unnoticed,” said the LCP, which has 145 city mayors as members.
Besides opening rice importation to private traders, the Rice Liberalization Law also benefits palay growers as revenues from rice import tariffs are earmarked for the annual P10-billion Rice Competitiveness Enhancement Fund (RCEF).
Under RA 11203, RCEF would help finance the modernization of the agriculture sector and directly provide farmers with access to credit and training, and funds for mechanization, high-quality seeds, and fertilizers, among other forms of assistance to sharpen their global competitiveness and increase their incomes.
The Bureau of Customs (BOC) has collected as of July 15 some P6.5 billion in duties from rice imports by private traders under the RA 11203.
At an average of P1.4 billion a month, the BOC remains on course to collect the minimum of P10 billion needed for the RCEF per year.
Section 13(c) of the rice tariffication law states that 10 percent of the P10-billion RCEF shall be made available in the form of credit facility with minimal interest rates and with minimum collateral requirements to rice farmers and cooperatives.
The rest of the RCEF will be set aside for farm machinery and equipment; rice seed development, propagation and promotion; and rice extension services, as provided under the rice tariffication law.
On top of paying tariffs, rice importers are required under RA 11203 to secure sanitary and phytosanitary import clearances (SPSIC) from the DA’s Bureau of Plant Industry (BPI), which assumed the food safety regulation function of the NFA under the rice tariffication law.
This requirement will ensure that rice imports are free from pests and diseases that could affect public health and local farm production.
Dominguez has described the rice liberalization law on the shift from quantitative restrictions (QRs) to tariffs on rice imports as a “proud” accomplishment of the Duterte presidency and the DOF, given that it took more than 30 years under various administrations to get the Congress to approve this game-changing reform.
President Duterte’s enactment of RA 11203 and his implementation of a slew of non-monetary measures to ease food supply bottlenecks in response to last year’s elevated inflation has resulted to a subsequent downward trend in the temporary spike in commodity prices.
