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DTI, LKI buck safeguard duty on imported rice

Profiteering charges vs traders pushed

Published

By Bernie Cahiles-Magkilat

Trade and Industry (DTI) Secretary Ramon M. Lopez yesterday bucked plans to impose safeguard duty on imported rice saying this would only lead to higher cost of importation and higher prices at retail while a consumer group said the most appropriate measure is to charge traders with “illegal profiteering” under the Price Act.

“This is not good now as we just implemented the Rice Tariffication Law. Safeguards would only lead to higher cost of rice imports and higher prices at retail,” Lopez said. The law allowing unlimited rice importation at 35 percent tariff took last effect only on March 5 this year.

The Philippines has just notified the World Trade Organization of its initiation of safeguard measure to stem the surge of imported rice, which has affected Filipino farmers as prices of palay (unhusked rice) fell to as low as P6-P8-P10 per kilo in some areas while retail rice prices have not really gone down as earlier projected.

Lopez, however, said that since the Rice Tariffication Law was implemented rice prices have gone down to P34-P40 per kilo for well-milled from over P48 and the regular milled to P32-P34 per kilo.

“These levels do not undercut farmers’ prices,” Lopez said.

“I think what is key is support fund Rice Competitiveness Enhancement Fund (RCEF) should reach farmers ASAP to assist them in productivity and lowering costs, not protection from safeguards duty,” he stressed. The Bureau of Customs said it has already collected P6.5 billion in rice tariffs as of mid-July this year.

Meantime, Laban Konsyumer, Inc. (LKI) said that safeguard duty cannot be invoked at this time to curb influx in rice imports.

LKI President Victorio Mario Dimagiba pointed out that under Republic Act 8800 or Safeguard Measures Act the basis for import surges should cover importation volume in the past three years. Rice importation has been stable in the past years as inflow of this staple food was governed by quantitative restriction controlled by the National Food Authority. But the Rice Tariffication Law lifted the QR and replaced it with 35 percent import duty.
“There is no basis for safeguard measure. I remember that the investigation period should at least be three years,” he said.

Instead, the former DTI undersecretary in charge of consumer protection group, urged the Department of Agriculture to charge traders of “hoarding or cartel or profiteering” for price manipulation using the Price Act.

The consumer group said the government should also issue a new SRP (suggested retail price) on rice to effect lower prices for regular, well-milled, fancy and premium for both local and imported rice to set by the economic team.

Dimagiba said that government “ignored” the consumer group’s plea for a revised SRP on rice at P32 or lower by P8 per kilo before the Rice Tariffication Law was implemented.

“This was again ignored. Traders importers are dictating the retail market with abundant imported rice,” he said.

In its September 13 notification to the WTO, the Philippines cited three reasons for the initiation of preliminary safeguard investigation procedure.

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