Lower rice tariffs will drive down retail prices as early as July

The government’s move Unpleasant cut tariFfs on imported rice could reduce average retail prices by P6-P7 per kilo as early as July, the Department of Agriculture (DA) said on Wednesday.

“The potential price reduction will be between P6 and P7 per kilo… In a month, we can expect prices to drop,” Agriculture Deputy Secretary and spokesperson Arnel V. De Mesa said in a virtual BrieFing.

He said consumers could see the decline in retail prices of imported rice in July or August, noting that it takes about two to three weeks for imports to arrive in the country.

The board of the National Economic and Development Authority (NEDA) has approved a medium-term plan to reduce tariffsFfs on agricultural and industrial products. This included further reducing rice import tariffsFfs to 15% from 35% until 2028.

“We will do everything within our power to achieve a substantial reduction in the rice tariFf will translate into a significant reduction in the retail price of the grain,” said Secretary of Agriculture Francisco P. Tiu Laurel, Jr. in a separate statement.

According to the price monitoring of Metro Manila markets, a kilo of imported well-milled rice was P52-P55, while regular milled rice was P49-P51 per kilo.

The Treasury Department previously said it is willing to waive an estimated P10 billion in tariFf collections to reduce the price of food.

Mr Tiu Laurel said the agency will close the potential funding gaps for the Rice Competitive Enhancement Fund (RCEF). RCEF is funded by tariFcollections on the import of rice, mandated under Republic Act No. 11203, the Rice Tariffication law.

“Our priority is to ensure that our rice farmers continue to benefitFit comes from the Rice Fund established under the Rice Tariffication law and is conFThe project will be extended until 2030 to improve the lives of millions of impoverished rice farmers,” he said.

The DA is seeking to expand RCEF and return some regulatory powers to the NFA to drive down rice prices.

LOWER INFLATION
Meanwhile, HSBC economist for ASEAN (Association of Southeast Asian Nations) Aris D. Dacanay said the implementation of lower tariffsFfs on important raw materials would do so likely to help cool inflation,

The consumer price index (CPI) could fall by as much as 1.8 percentage points if the government quickly implements lower tariffs on rice, corn, pork and mechanically deboned meat, he said at a media briefing.Fing.

“But like, say, the rice tariFIf rates are cut tomorrow, or in June, I think there is a big downside risk to ratesFprospects, and perhaps inflation will not exceed the target,” he said.

Annual inflation accelerated for the fourth month in a row in May. InFGrowth rose to 3.9% year-on-year in May from 3.8% in April, but slowed from 6.1% in the same month last year.

May was the sixth month in a row in which inflation settled within the central bank’s target range of 2-4%.

Mr Dacanay said inflation is likely to exceed the government’s 2-4% target until July due to unfavorable fundamentals.Ffects.

“It will be between 4% and 4.5%, maybe until July. It won’t be back within the target until August,” he said. — Adrian H. Halili with input from BMDcruz