“We are technically in violation of the WTO agreement, which means they can impose sanctions on us anytime,” said Roehlano Briones, a research fellow at policy think-tank Philippine Institute for Development Studies. Manila decided not to seek any further extension to avoid more trade-offs. That special treatment aimed at protecting local farmers was extended several times until 2017, but some WTO members bargained for non-rice trade concessions. The government could raise up to 27 billion pesos annually, or about $500 million (£384.26 million), from rice tariffs, according to finance department calculations.īut farmer groups said in a paper presented to lawmakers in July that the step would drive down prices for their produce, hurting their business and impacting local supply chains. Only about 1 percent of imports come from countries outside Southeast Asia.Įven with a 35 percent tariff, imported rice would cost around 30 pesos a kilo, over 10 pesos cheaper than current prices for local grain. Under the move, supply from Southeast Asia will be charged a 35 percent tariff and imports from elsewhere will face duty of up to 180 percent, with proceeds used to help farmers by financing projects to modernise the industry and boost its efficiency. The policy shift was approved by the lower house in early August, and head of the Senate food and agriculture committee Cynthia Villar said this week that the upper chamber would start deliberations on the issue “any day now”. President Rodrigo Duterte, whose government has been suffering signs of decline in opinion polls in the wake of the high inflation, has been pushing for Congress to give the go-ahead to replace the import limits with a system of tariffs.
“Pulling down rice prices is crucial to poverty reduction because this staple is a major driver of inflation,” Gil Beltran, undersecretary in the department of finance, told Reuters. That jump has hit consumers hard in a country where rice is at the heart of people’s diets, and has helped keep inflation at its highest in over nine years. Rice prices in the Southeast Asian country’s shops and markets climbed about 9 percent from January to July to an average 42 pesos (£0.60) per kilo amid limited supplies due to import delays.
The move would also be a boon to the Philippines’ main overseas suppliers of the grain, Vietnam and Thailand, with imports seen potentially doubling to 3 million tonnes a year, making the nation the world’s No.2 buyer after China.
Different varieties of rice for sale is seen at a food market in Paranaque, Metro Manila in Philippines, August 31, 2018.