PSA: Tariff rate cut seen to slash rice prices by P6-P7 per kilo

The government’s move to reduce tariff rate for imported rice is expected to trigger a reduction in rice inflation and overall inflation in the country, the Philippine Statistics Authority (PSA) said Wednesday.

“The NEDA Board approved a reduction in the tariff sa rice… that would trigger reduction in prices. Impact on the price per kilo of the tariff reduction is about P6 to P7… That would be substantial,” PSA chief and National Statistician Claire said at a press conference.

Mapa, however, said the estimate per kilo reduction in rice resulting from the tariff rate cut was only a “quick calculation.”

“In terms of actual impact, we will still rely on the survey data,” he said.

The NEDA Board, chaired by President Ferdinand "Bongbong" Marcos Jr., on Tuesday approved the reduction of rice import tariff rate to 15% from 35% until 2028 with the aim of making the grain staple more affordable, especially for the poor and vulnerable. 

“That will have a large impact on inflation for rice and overall inflation,” Mapa said.

To illustrate, the PSA chief said rice contributed 1.7 percentage points to the 3.9% inflation rate in May.

Moreover, the weight of rice to the inflation felt by the bottom 30% of income households (at 5.3%) was 3.7 percentage points or about 70%.

Mapa said that while tariff rates were reduced, the exchange rate will also be a factor in the actual retail prices of imported rice in the market.

The Philippine peso hit its lowest level in 19 months again on Tuesday, closing at P58.71:$1 from P58.68:$1 on Monday. 

Rice inflation, meanwhile, stood at 23% in May, slower than the 23.9% rate seen in April as global rice prices have been consistently going down recently.

On the retail level, the average price per kilo of regular milled rice in May was at P51.25 from P51.3 per kilo in April.

Well-milled rice was at P56.42 per kilo last month from P56.6 per kilo in April, while special rice saw a slight decline to P64.41 per kilo from P64.68 per kilo month-on-month.  —VAL, GMA Integrated News