Tariff Rate Cut Expected to Reduce Rice Prices by P6-P7 per Kilo

The government’s decision to lower the tariff rate on imported rice is projected to reduce rice prices and help control overall inflation in the Philippines, according to the Philippine Statistics Authority (PSA).

The National Economic and Development Authority (NEDA) Board, chaired by President Ferdinand “Bongbong” Marcos Jr., approved reducing the rice import tariff rate from 35% to 15% until 2028. This move aims to make rice more affordable, especially for the poor and vulnerable populations.

PSA Chief and National Statistician Claire Mapa noted at a press conference that this tariff reduction could lower rice prices by P6 to P7 per kilo. However, she cautioned that this figure was a preliminary estimate and actual impacts would depend on survey data.

“This will significantly impact rice inflation and overall inflation,” Mapa said, highlighting that rice contributed 1.7 percentage points to the 3.9% inflation rate in May. For the bottom 30% income households, rice accounted for 3.7 percentage points, or about 70%, of their felt inflation.

Despite the tariff reduction, the exchange rate will also influence the retail prices of imported rice. The Philippine peso recently hit its lowest level in 19 months, closing at P58.71:$1.

In May, rice inflation stood at 23%, slightly down from 23.9% in April, reflecting a decline in global rice prices. Retail prices for rice in May showed a minor decrease, with regular milled rice averaging P51.25 per kilo, well-milled rice at P56.42 per kilo, and special rice at P64.41 per kilo.