Rice tariff collections hit record-high P30 billion

RCEF budget guaranteed

MANILA, Philippines — The country’s rice tariff collections reached a new record high after breaching the P30 billion mark, guaranteeing the amount needed to bankroll the proposed expanded state programs aimed at developing the local industry.

Preliminary Bureau of Customs (BOC) data showed that total tariffs collected from some 3.86 million metric tons (MT) of imported rice reached P30.095 billion at the end of October.

The total tariffs collected was 5.21 percent higher than the P28.604 billion collected in the same 10-month period last year, based on BOC data.

It also surpassed the P29.93 billion rice tariffs collected for the entire 2023.

The increase in rice tariff collections was driven by the higher volume of imports, a weaker peso and better shipment valuation by the customs bureau despite the lowering of the tariff rate to 15 percent in July.

With the latest tariff collections, the government is now assured of its budgetary requirement to bankroll the proposed expanded rice competitiveness enhancement fund (RCEF) beginning next year.

Under the proposed bill amending the rice tariffication law, the RCEF would be extended until 2031, with its earmarking fund raised to P30 billion from the present P10 billion allocation.

The budget for the RCEF shall come from the tariff collections on imported rice, with the possibility of augmentation through the General Appropriations Act if the total tariff collections fall below the earmarked fund of P30 billion.

The Congress-approved bill was sent to Malacañang last Nov. 7 and is currently awaiting the approval of President Marcos.

Philippine Chamber of Agriculture and Food Inc. president Danilo Fausto said the total rice tariff collections this year could settle between P32 billion and P33 billion, with more imported rice expected to arrive in the last two months of the year.

The additional rice imports, Fausto pointed out, would be driven by the need to replace the local harvest that was damaged and displaced by the series of typhoons that battered the country recently.

“(The) RCEF... has to be extended since it gives assurance of funding for increased rice productivity,” he told The STAR.

Total imported rice as of end-October expanded by 35.74 percent year-on-year to 3.863 million MT from 2.846 million MT last year, BOC data showed.

Raul Montemayor of the Federation of Free Farmers estimated that the government lost some P9.2 billion in tariff collections since the rice tariff cut took effect last July.

The figure, Montemayor pointed out, does not yet include the state losses due to rice shipment undervaluation which he estimated to be around P4.8 billion from January to October.

Montemayor cautioned that some of the line items or budgetary items of the DA could be affected in succeeding years if tariff collections fall below P30 billion, which would force the government to frontload the remainder through the department’s regular budget.

“It may be difficult to program both the RCEF and the regular National Rice Program (NRP) if they do not know the total budget of the DA. RCEF may suddenly siphon some of the budget of the NRP,” he said.

“Or the RCEF will just have to work within the tariff collections actually collected. Of course, Congress can just augment the RCEF budget if it is lacking and leave the NRP budget in tact but we do not know if that will actually happen,” he added.

The proposed legislation on the extension of the RCEF stipulated that the deficiency in the P30-billion RCEF would be sourced from a “new” provision or item in the DA budget in the GAA beginning 2025.