1. Filipino-Chinese business group
2. Lower rice tariffs
3. Trade policy advocacy
The Federation of Filipino Chinese Chambers of Commerce and Industry, Inc. (FFCCCII) supports Finance Secretary Ralph Recto’s proposal to lower the tariff on rice from 35 percent to further alleviate inflation worries and promote economic stability. The group believes that reducing rice tariffs will make the staple more affordable for Filipino consumers, as imported rice plays a significant role in the country’s rice supply. However, the Federation of Free Farmers (FFF) opposes the move, citing potential losses for rice growers and foregone customs revenues that are earmarked for rice farmers’ productivity programs. Recto will need to consult with the Tariff Commission and the Department of Agriculture before implementing the proposal.
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The Federation of Filipino Chinese Chambers of Commerce and Industry, Inc. (FFCCCII) has voiced its support for the suggestion made by Finance Secretary Ralph Recto to further reduce the tariff on rice from the current 35 percent. Recto revealed the government’s plan to temporarily lower rice tariffs until the end of 2024, emphasizing the importance of decreasing the price of this staple in the local market.
In a statement, FFCCCII President Cecilio Pedro explained that lowering tariffs has the potential to address inflation concerns for Filipino consumers and promote economic stability. The group believes that this initiative aims to combat inflationary pressures caused by high rice prices in the country. By making rice more affordable, imported rice can significantly contribute to the country’s rice supply.
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For this proposal to move forward, the Tariff Commission will need to conduct a hearing, and the Department of Agriculture (DA) will need to be consulted before President Marcos Jr. can issue an executive order modifying the rates.
However, not everyone is in favor of this move. The Federation of Free Farmers (FFF) strongly opposes the reduction in tariffs, stating that the projected P5 per kilo reduction in rice prices could lead to a decrease in palay prices by P3 per kilo. The FFF argues that the influx of cheap imported rice into the market could result in total losses of P33 billion for rice growers in the second half of the year.
Additionally, the FFF highlights that the government could lose out on P10 billion in customs revenues if an additional 2 million tons of rice are imported in the second semester. These revenues are legally earmarked for rice farmers’ productivity programs, further complicating the issue.
Together with the potential losses from reduced palay prices, farmers could face a total loss of P43 billion due to the proposed tariff cut for 2024 alone. The concerns raised by the FFF underscore the complex dynamics at play in the rice industry and the balancing act required to ensure the well-being of all stakeholders.
In conclusion, the debate over lowering rice tariffs in the Philippines reflects the intricate interplay between economic policy, consumer welfare, and agricultural sustainability. While the move could benefit consumers by making rice more affordable, it also poses risks to local rice growers and government revenues. Finding a solution that strikes a balance between these competing interests will be crucial in navigating the complexities of the rice market in the country.