Rice tariff collections up 34% to P23 billion in H1

MANILA, Philippines — Rice tariff collections in the first semester rose by more than a third on a yearly basis to over P23 billion, driven by elevated import volume coupled by higher import prices, the Bureau of Customs (BOC) said.

Preliminary BOC data showed the agency collected P23.193 billion in tariffs from January to June, about 34 percent higher than the P17.28 billion collected in the same period last year.

BOC data indicated that rice tariff collections this year were lifted by the 23.63 percent year-on-year rise in import volume, coupled by higher declared import prices by importers that saw a nearly 35 percent increase.

The country imported 2.284 million metric tons (MT) of rice during the reference period, some 436,000 MT more than last year’s 1.848 million MT recorded volume.

The average price of imported rice during the six-month period was at $512.35 per MT, 34.79 percent higher than the $380.11 per MT average quotation a year ago.

Global rice prices remain elevated this year as tightness in world supply persists amid the continued export restriction by India on its non-Basmati rice stocks.

The average price of Vietnam’s five percent broken rice – the most common variety bought by Philippine importers – in the first half rose by 26 percent year-on-year to $582 per MT from $461.2 per MT last year, according to the United Nations’ Food and Agriculture Organization.

The depreciation of the local currency against the dollar also contributed to the higher rice tariff collections. The average foreign exchange rate in the first half was at P56.76 to $1, about 2.68 percent weaker compared to the $55.28:$1 exchange rate last year, based on BOC data.

Raul Montemayor of the Federation of Free Farmers said rice imports are expected to surge once the reduced tariff rate of 15 percent is implemented by the government.

However, Montemayor said, this would be at the cost of tariff collections.

“The import volume has to more than double to generate the same (tariff collections as last year), which seems improbable,” he told The STAR.

Rice tariff collections last year reached a record high of nearly P30 billion on the back of 3.6 million MT of imported stocks.

Rice tariff collections have been critical in recent years or since the passage of the Rice Tariffication Law (RTL) in 2019 since all tariffs collected by the government are earmarked for the development of the local rice industry through the Rice Competitiveness Enhancement Fund (RCEF).

Both the legislative and executive branches of the government are deliberating the extension of the RCEF for another six years to further improve Filipino rice farmers’ competitiveness.

Part of the deliberations is how much would be the new earmarked budget for RCEF and how it would be financed should there be any shortfalls in tariff collections. At present, RCEF has a guaranteed budget of P10 billion.

Sen. Cynthia Villar, principal author of RTL, said the rice tariff reduction to 15 percent would cause tariff collections to plunge by 60 percent.

Villar noted that the P30 billion rice tariff collection last year would drop to P12 billion under the new tariff rate.

“That is why I am talking to the Department of Finance (DOF) on who will finance the difference,” she said.

The Department of Agriculture is of the view that any differences between the earmarked fund of RCEF and tariff collections must be shouldered by the government.