Filipino households managed to save at least P0.50 for every P100 they spent since August because of the new policy on rice importation that lowered the cost of the staple, the Department of Finance (DOF) said on Friday (September 13).
The DOF based this on the 1.7 percent inflation rate in August, which was significantly slower than the 2.2 percent average increase in prices recorded in August 2018.
The biggest contributor to this low inflation was the 5.2-percent average drop in the prices of rice in August 2019 compared to the same month last year. This was the fourth consecutive month of deflation for rice.
“At the household level, the August 2019 inflation rate means an additional spending of just P1.70 for every P100 spent in the same month last year. Had rice inflation remained flat YOY (year on year), the additional spending would have been P2.20 for every P100,” the DOF said.
The DOF’s Strategy, Economics and Results Group (SERG) said the record-low inflation rate was largely due to President Duterte’s enactment of the Rice Tariffication Law (RTL), or Republic Act (RA) 11203. The new policy replaced the quantitative restriction scheme in the importation of rice.
“The lifting of quantitative restrictions (QRs) on rice imports helped increase the domestic supply of the staple, thereby pulling down retail prices by P7 to P10 per kilo and benefitting most especially poor Filipinos who spend about 20 percent of their total household budget on rice,” SERG noted.
Jose Sosa of the Bulacan Consumer Affairs Council, Inc. validated this in a Malacañang economic press briefing last Sept. 4.
According to the consumer group leader, local-milled rice in Sta. Maria, Bulacan now costs only P25 to P32 per kilo.
“This downtrend is expected to help reduce poverty incidence, malnutrition, and hunger in the medium-term as more Filipino families gain access to affordable and high-quality rice,” SERG added.
As of 31 August, the government has raised P9.2 billion in customs duties from 1.5 million metric tons (MT) of rice imported by the private sector under the new tariffication regime as put in place by RA 11203.
The tariff revenues from the rice imports are being utilized to boost our local farmers’ productivity and global competitiveness through the Rice Competitiveness Enhancement Fund (RCEF), which RA 11203 has set up with an annual allocation of at least P10 billion.
Of the P10-billion RCEF fund, P 5 billion will go to rice farm machineries and equipment to be administered by the Philippine Center for Postharvest Development and Mechanization (PhilMech), P2 billion to the production of high-yield seed varieties by the Philippine Rice Research Institute (PhilRice), P2 billion to skills training programs of Technical Education and Skills Development Authority (TESDA) and P1 billion to credit facilities via the Land Bank of the Philippines (LandBank) and the Development Bank of the Philippines (DBP).
Should tariff collections exceed P10 billion pesos, the excess amount shall also be utilized for similar intervention programs to boost rice farmers’ productivity.