Senate approves rice tariffication bill on 3rd reading

Voting 14-0, the Senate on Wednesday approved on third reading the proposed rice tariffication law that seeks to lift quantitative restrictions on rice and allow private traders to import the staple from countries of their choice.

Senate Bill 1998, sponsored by Senator Cynthia Villar, is being pushed by the administration to address inflation, which is currently at a nine-year high.

Rice tariffication is expected to trim inflation by 0.8 percentage points, the Bangko Sentral ng Pilipinas earlier stated. 

President Rodrigo Duterte earlier certified the rice tariffication bill as urgent to facilitate its immediate passage. He cited the “urgent need to improve availability of rice in the country, prevent artificial rice shortage, reduce the prices of rice in the market, and curtail the prevalence of corruption and cartel domination in the rice industry.”

The certification allowed the Senate to forego the three-day rule and approve the bill on the same day it is approved on second reading.

The House passed its version of the bill in August.

Senate President Pro Tempore Ralph Recto said the senators ensured that the bill will mandate that all duties collected from imported rice be plowed back to farmers through “a raft of assistance in the form of equipment, insurance, credit, and even direct financial aid.”

“The Senate position is that government should not profit from rice tariffication,” he said in a press statement.

The Senate agreed on setting the Rice Competitive Enhancement Fund (RCEF) at a minimum P10 billion a year for six years, with tariff revenues in excess of P10 billion to be appropriated by Congress based on a menu of programs in the rice tariffication law.

“The result is a 100-percent plowback rate. Everything will be returned to the farmers. They will get all the dividends to compensate for their losses, which I think will never be enough,” Recto said.

“Duties will be spent to cover their losses, improve their productivity and not to plug the budget deficit,” he added.

Recto said that some quarters in the government were toying with the idea of using rice tariffication to “shore up the government’s fiscal position.”

“But rice tariffication is not a revenue measure. By stipulating in the bill that 100 percent of duties will be plowed back to farmers, we are sending a strong message to those who might be tempted to use it to primarily raise taxes that their idea is dead in the water,” he said.

The senator said there was a proposal from an agency in the government’s economic cluster to limit plowbacks to P10 billion a year “even if duties collected from imported rice are double or triple that amount” and all excess collections will effectively be booked as national income.

“Unfair naman ‘yan. Kung halimbawa P25 billion ang collection, ibig sabihin mas malaki pa ang share ng pamahalaan kaysa sa mga magsasakang maapektuhan? Farmers get the pain and government gets the gain?” Recto said.

He said government think tank Philippine Institute for Development Studies projected government revenues from rice tariffs would range from P13.9 billion to P27.7 billion next year. — RSJ/BM, GMA News