THE proposed tariff cut on rice imports should not impact farmgate prices for palay (unmilled rice), National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said.
“As I said, any proposal to reduce tariffs must not reduce farmgate prices. Farmers must be protected,” he told BusinessWorld at the sidelines of the national budget plenary debates at the House of Representatives on Tuesday.
“Any proposal to reduce tariffs, we have to calibrate that particular issue, balancing the interests. Most importantly, protecting farmers (from) reduction in their farmgate prices,” he added.
The Department of Finance earlier proposed to temporarily slash the 35% ASEAN (Association of Southeast Asian Nations) and MFN (Most Favored Nation) rice tariff rates to zero percent up to 10%.
Asked if NEDA had proposed a specific percentage for the tariff cut, Mr. Balisacan said it is “too early to disclose anything.”
However, he noted that the tariff cut would not even be considered if oil prices were not elevated.
“If oil prices were not rising sharply, there should be no discussion of tariff reduction,” he said in a mix of English and Filipino.
Oil firms hiked pump prices on Monday by P2 per liter of gasoline, P2.50 per liter of diesel, and P2 per liter of kerosene.
Fuel prices have gone up by a total of P11.85 per liter for gasoline, P17.30 per liter for diesel, and P15.94 per liter for kerosene since the second week of July.
“Again, the context is that oil prices are rising, and sharply rising over the last couple of months. We would want to prevent that (from) spilling into the local economy, because we have quite high inflation still, especially for rice,” Mr. Balisacan added.
Headline inflation unexpectedly quickened to 5.3% in August from 4.7% in July, bringing the year-to-date average to 6.6%. This was well above the central bank’s 5.6% full-year forecast.
Rice inflation also surged to 8.7% in August from 4.2% in July due to tight supply.
“We want to make sure (fuel price spike) would not lead to sharp increases in rice prices, thereby making it even more difficult to cope with inflation, so we are studying this,” he added.
Meanwhile, Mr. Balisacan welcomed the hike in the purchasing price for palay.
“The increase in farm price is long overdue, it’s been lower than the prevailing market price, so that was a welcome move,” he said.
The National Food Authority Council on Monday approved a new buying price range for dry palay at P19-P23 per kilogram, and for wet palay at P16 to P19 per kilogram.
Data from the local statistics authority showed that the average farmgate price of palay increased by 9.4% year on year to P19.23 per kilogram in June.
To address rising prices, an executive order earlier this month set a price ceiling at P41 per kilo for regular milled rice and P45 per kilo for well-milled rice. — Luisa Maria Jacinta C. Jocson