MANILA -- The Department of Finance’s (DOF) proposed rice tariff reduction could lead to a P4 to P5 peso per kilo drop in rice prices, according to the Department of Agriculture (DA) on Wednesday.

Speaking at a forum in Manila, DA Spokesperson Assistant Secretary Arnel De Mesa said this may be achieved if the already lowered 35 percent tariff rate on rice being imposed right now would be further halved to 17.5 percent.

“Pag may nakita sa palengke na P40 level, say, P45 na bigas, eventually yung merkado susunod (If we see rice being sold in the market, for, say, P45, the market will follow). It will correct itself,” said De Mesa.

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De Mesa’s statement comes days after DOF Secretary Ralph Recto said that the agency is eyeing to further reduce rice import tariffs, while sustaining efforts to increase local production.

During Wednesday’s forum, DOF Undersecretary Domini Velasquez said the agency is eyeing to reduce rice import tariffs to 15 to 20 percent, just in time for the lean season of rice production in the Philippines.

“Kasi may lean season ka until, I think, mid-September. So baka makatulong doon. Kasi even though bumababa ang (rice) prices globally, may pressure pa rin sa lean season mo,” she said.

(Your lean season is until mid-September. Lower tariffs may help during that period. Even though rice prices have gone down globally, there is still pressure during lean season.)

While this would result in about P10 billion in foregone revenues for the government, Velasquez said it’s a price they are willing to pay to bring down inflation.

But according to Velasquez, the Tariff Commission would first have to hold public hearings on the matter to see how the proposed policy could impact the livelihood of farmers and other stakeholders.

“Titignan natin kung actually makakababa ba, makatutulong, is it timely right now? So yun yung important,” she added.

(We have to see if it can really help by lowering rice prices. Is it timely right now? That's what's important.)

De Mesa, for his part, believes the reduced rice tariff may not significantly affect farmers this time around since the National Food Authority is now buying their palay or unmilled rice at a more competitive price or as much as P30 per kilo.

“Hindi masyadong maaapektuhan yung farmers ngayon at the current farmgate prices that we have… Actually, ngayong panahon na ‘to, masaya ang farmers,” said De Mesa.

(I don't think farmers will be affected so much..actually at this time, our farmers are happy.)

CUTTING RICE TARIFFS NOT EFFECTIVE IN BRINGING DOWN PRICES?

But agricultural group SINAG reiterated that lowering rice tariffs is not the way to go.

SINAG Executive Director Jayson Cainglet noted that the Philippines has been on a reduced rice tariff regime for years now, and yet the retail price of rice remains high.

“Hindi naman nakinabang ang consumer, hindi nakinabang ang producer, hindi rin nakinabang ang government because of lost revenues,” he said.

(The consumer doesn't benefit, the producer doesn't benefit, and the government doesn't benefit because of lost revenues.)

“Very few privileged importers and traders ang nakikinabang sa tariff reduction from experience natin yan for the last years,” added Cainglet.

Cainglet added that it would have a double whammy effect on rice farmers.

“Dalawang dagok sa farmers natin. Ide-depress mo yung farmgate, mababawasan pa yung makukuha niyang support service because by reducing tariff, liliit yung makokolekta ng customs under the Rice Tariffication Law. Yung main support sa farmers ay yung tariff sa bigas,” he explained.

Cainglet hopes that the government will just focus on boosting local agricultural production.

“Okay ang initiatives ng DA ngayon, wala tayong problem. Kaya nagtataka tayo bakit tinutulak nanaman ng economic managers yung tariff reduction?” he said.

(We are satisfied with the DA's initiatives as of now, we have no problem. So we are surprised: why are economic managers pushing again for tariff reduction?)

De Mesa meanwhile insisted that the DA will not stop with its efforts to boost agricultural production, specifically by reducing the production cost of farmers.

According to De Mesa, the DA has a proposed budget of P513 billion for 2025, a big chunk of which will be used to put up irrigation systems.

President Ferdinand Marcos Jr in December last year issued EO 50 extending the modified import tariffs on rice, corn and meat products until the end of 2024.

Rice inflation slightly went down to 23.9 percent in April, from 24.4 percent in March.

Finance Secretary Ralph Recto said rice prices in the Philippines are expected to decrease by 20 percent in September.

PH rice prices seen falling 20 pct by September: Recto