RCEF expansion, VAT refund for non-resident tourists signed into law

President Ferdinand “Bongbong” Marcos Jr. on Monday signed the measure extending the life of Rice Competitiveness Enhancement Fund (RCEF) into law.

During the ceremonial signing, Marcos also inked the VAT refund for non-resident tourists.

Senate President Francis “Chiz” Escudero said that through the signing of Republic Act No. 120278 or the Amendments to Agricultural Tariffication Act, the local rice farmers will receive greater support from the government due to the provision of farm machinery and equipment, free distribution of high quality inbred certified seeds, and other interventions.

The new law also extends the life of the RCEF, which is sourced from the tariffs collected from rice importation, until 2031.

Further, a rise in the annual allocation to the RCEF will be instituted, from the current P10 billion to P30 billion until 2031. 

In his speech, Marcos said that through the RCEF, the country was able to invest in high-quality seeds, mechanization, and training of local farmers, a move that will guarantee that they are equipped with the right skills and tools to increase productivity.

''With the expiration of the original six-year plan for RCEF fast approaching, it became clear that we needed to extend and strengthen the program. And this is where this law comes in, extending the program to 2031, and significantly increasing its funding from the original P10 billion to P30 billion annually,'' Marcos explained.

''This will enable us to do much more for our farmers, ensuring that they have the resources that they need to succeed and to make the rice industry even more competitive,'' he added. 

Marcos also said the new law would place significant emphasis on reducing post-harvest losses. 

''By preventing up to 375,000 tons of milled rice from being wasted annually, we can help feed an additional 3.4 million Filipinos each year for the next six years—improving food security and making rice more accessible to everyone,'' the President said.

The expansion of the annual allocation will pave the way for new initiatives such as soil health improvement, pest and disease management, the establishment of solar-powered irrigation systems and small water-impounding projects, as well as the distribution of composting facilities for biodegradable wastes. 

Meanwhile, the new law will also strengthen the Department of Agriculture’s regulatory functions by creating and maintaining a database to monitor the country’s rice reserves.

Marcos, who served as the Agriculture chief at the start of his presidency, said the DA would be empowered to take the necessary actions to stabilize the market, ensuring that the price of rice remains affordable and accessible to every Filipino.

''Above all, this law empowers our farmers to thrive and to help our country secure a stable food supply. By increasing investments in agriculture, providing more resources, and creating a more competitive rice industry, we are laying the groundwork for a stronger, more self- sufficient Philippines,'' he said.

Agriculture Secretary Francisco Tiu Laurel thanked Congress for extending the RCEF, noting that the new law will be a good investment for the country's economic future.

''The increased funding to enhance the rice industry’s competitiveness will boost both rice yields and farm output, benefiting millions of farmers and their families, as well as millions of poor Filipino consumers who need more affordable rice,” Tiu Laurel said in a press release.

“Improving incomes from rice farming will attract a new generation of farmers to replace our aging workforce, helping to fulfill President Marcos’ vision of a food-secure Philippines, where no Filipino goes hungry,” he added.

The new law also allows the National Food Authority to sell rice buffer stocks to government agencies and the public, through KADIWA ng Pangulo centers, in areas that are experiencing rice supply shortages or extraordinary price increases. 

It also permits the replenishment of NFA rice buffer stocks with either locally produced or imported rice in case of insufficient supply of locally produced rice.

Meanwhile, in his veto message, Marcos said he was constrained to reject a provision in Section 2 of the measure as well as a portion of Section 5 as ''these may be inconsistent with the principles of sound public fiscal management.''

He also argued that setting aside an amount of P5 billion from the current unutilized portion of the DA's annual budget to be credited to the rice buffer fund runs against the directive in Section 44 of Executive Order No. 292, which states that all accruing income of agencies shall be deposited in the National Treasury and shall be part of the unappropriated surplus of the general fund of the government.

Marcos added that the provision involving an excess amount of not more than P2 billion from the annual tariff income from rice importation collected by the Bureau of Customs to be credited to the same buffer fund, instead of reverting to the National Treasury, also proves to be inconsistent with the general principles of National Government budgeting.

VAT refund 

On the other hand, Marcos said the VAT refund program for non-resident tourists has been designed not only to stimulate more spending but to promote the Philippines as a premier global shopping destination.

Under the new law, tourists can claim a refund on the VAT for goods personally purchased at accredited retail outlets, provided that these goods are taken out of the country within 60 days and meet a minimum transaction requirement of P3,000.

''This initiative opens a new chapter in our tourism landscape, allowing the country to compete with other tourism markets that attract tourists who are eager to take home authentic, high-quality Filipino products,'' Marcos said.

He expressed confidence with the positive economic impact of the said measure, noting an almost 30% increase in tourist spending. 

''This surge will benefit both large-scale industries and micro, small, and medium enterprises—an important pillar of our local economy,'' said Marcos.

The President then urged the Department of Finance and the Bureau of Internal Revenue to craft implementing rules and regulations that will make the VAT refund process simple, accessible, and culturally inclusive.

For her part, Tourism Secretary Christina Frasco said this new law would bring more revenues for the Philippines, noting that this will help small businesses. 

''Mas lalaki pa 'yung income ng ating small and medium enterprises at mas dadami pa 'yung trabaho para sa ating mga kababayan,'' Frasco said. 

(The profit of small and medium enterprises will increase and there will be more jobs for our people.)

Citing the DOF, the Presidential Communications Office said the estimated VAT refunds to tourists may reach P2.9 billion to P4.1 billion annually. 

It also noted that the projected loss could be offset by the potential increase in tourist spending and a boost in inbound tourism.—AOL, GMA Integrated News