Philippine Foundation Proposes PITC Oversee Rice Imports Amid NFA Debate

The Philippine House of Representatives is debating amendments to the 2019 Rice Tariffication Law to restore the National Food Authority's power to trade rice. The Philippine Foundation for Economic Freedom proposes an alternative solution, suggesting the Philippine International Trading Corp. oversee rice imports instead.

author-image
Trim Correspondents
New Update
Philippine Foundation Proposes PITC Oversee Rice Imports Amid NFA Debate

Philippine Foundation Proposes PITC Oversee Rice Imports Amid NFA Debate

As the Philippine House of Representatives moves to expedite debates on amending the 2019 Rice Tariffication Law (RTL) to restore the National Food Authority's (NFA) power to trade rice, the Philippine Foundation for Economic Freedom (FEF) has proposed an alternative solution. The FEF suggests that the Philippine International Trading Corp. (PITC) should oversee rice imports to comply with the RTL, instead of the NFA.

Why this matters: The proposed amendments to the RTL have significant implications for the country's food security and economy, as rice is a staple food for many Filipinos. The outcome of this debate could affect the prices and availability of rice, impacting the livelihoods of farmers, consumers, and the overall economy.

The FEF believes that the PITC has a mandate to import rice "if there is an urgent justification for importing rice." They argue that this is a better option because the public perception is that the Department of Agriculture should promote the interests of cultivators rather than consumers, while the Department of Trade and Industry (DTI) is legally mandated to perform the latter.

The RTL, enacted in 2019, privatized the function of importing rice, allowing private traders to bring in their own shipments provided they pay a 35% tariff on Southeast Asian grain. The law is currently being amended due to the perception that it has not arrested rising prices. However, the FEF warns that giving back the NFA's power to import rice and regulate rice retail trading will reverse all the beneficial reforms in the rice policy framework and reinstate the previous framework, which was historically prone to governance vulnerabilities and fiscal unsustainability.

Sen. Cynthia Villar, chairperson of the Senate Committee on Agriculture and Food, also opposes the House's proposal to restore the NFA's import power to trade rice. Villar suggests placing the mandate under the Office of the President instead, citing concerns about the NFA's sincerity and ability to care for rice farmers and consumers. "I'm worried about giving [the mandate] back to the NFA. I've not seen its sincerity. It has not proven itself to be taking care of the welfare of the rice farmers and the consumers," Villar stated.

Rep. Wilfrido Mark Enverga, chairperson of the House Committee on Agriculture and Food, assures that the NFA's role in rice importation would be limited to emergency situations and when local rice supply is unavailable under the proposed amendments. "The NFA, as it was before, before they had the full monopoly in terms of rice imports, they had monopoly in terms of regulation that's why I would like to ensure our counterparts in the Senate that this is a different scenario," Enverga emphasized.

As an alternative solution, the FEF proposes that the government consider temporarily reducing the rice import duty from 35% to 10% to lower the landed cost of imported rice, which may result in lower wholesale and retail prices. Additionally, they suggest that the NFA should focus on its "integral function" of procuring palay and building a "buffer stock" for emergency situations.

The FEF urges Congress to look into the results of studies on how the Rice Competitiveness Enhancement Fund was implemented and how the National Rice Program performed before proposing amendments to the RTL. This will allow for a rational and scientific approach to addressing the challenges hounding the rice sector. The House aims to pass the amended RTL on second reading by May 15, with the goal of lowering rice prices to under P30 per kilo by July.

Key Takeaways

  • Philippine House of Representatives debates amending 2019 Rice Tariffication Law to restore NFA's power to trade rice.
  • FEF proposes alternative solution: PITC should oversee rice imports, not NFA, to ensure food security and economy.
  • Sen. Cynthia Villar opposes restoring NFA's power, suggests placing mandate under Office of the President instead.
  • Rep. Wilfrido Mark Enverga assures NFA's role in rice importation would be limited to emergency situations.
  • FEF suggests temporarily reducing rice import duty from 35% to 10% to lower prices and focus on NFA's "integral function".