Senators Demand Data on Impact of Lowered Tariffs on Rice Prices

Senators Question Effectiveness of Lowered Tariffs on Rice Prices

Senators have called on economists and experts to provide data demonstrating how reduced tariff rates affect the market price of rice. This request follows the Philippine Statistics Authority’s (PSA) failure to present relevant figures during a Senate committee hearing on agriculture, food, and agrarian reform.

Concerns Over Tariff Reduction

During the hearing on the Rice Tariffication Law, Senator Cynthia Villar, chairperson of the panel, questioned the lack of studies linking tariff reduction to lower rice prices. “It’s okay to bring down the tariff but how will it affect the price of rice because that is the intention,” Villar stated.

Senator Imee Marcos echoed this concern, noting that despite lowering tariffs from 50% to 35%, rice prices have continued to rise. “Before it was 34 pesos per kilo … now it has ballooned to 62 pesos per kilo,” Marcos pointed out.

Seeking Clarity on Price Trends

Marcos argued that the current trend contradicts the intended effect of tariff reductions, citing the similar unfulfilled promise regarding imported pork meat tariffs. She stressed the need for expert explanations on why prices increase as tariffs decrease.

Expert Insights

Roehlano Briones, a research fellow at the Philippine Institute for Development Studies (PIDS), explained that the retail price of rice rose in 2023 due to global market conditions. However, Marcos countered that with global rice prices on an upward trend, lowering tariffs won’t achieve the intended price reduction in the domestic market.

Development Over Regulation

Senator Villar emphasized that the solution lies in developmental strategies rather than merely adjusting tariff rates. She pointed to the Rice Competitiveness Enhancement Fund (RCEF) as a necessary focus, criticizing the Department of Agriculture (DA) for being too regulatory and not developmental enough. The DA responded that they are currently following this developmental approach.

Recent Tariff Changes

Earlier this month, the government reduced the rice tariff from 35% to 15%, effective from 2024 to 2028, in an effort to bring the price of rice down to P29 per kilogram for the poor.