ECONOMIC managers of the Duterte administration stand firm on their decision to lift the country’s quan-titative restriction (QR) on imported rice to encourage local farmers to complete and boost production, Socioeconomic Planning Secretary Ernesto Pernia said.
An analyst from US-based think tank IHS Markit shares the same view, saying consumers may benefit from it through lower rice prices.
The Philippines was given a special exceptional waiver by the World Trade Organization (WTO) in 2014 to apply rice import quotas until June 2017.
“I am sure some people like it [the QR]extended, but in the opinion of the economic cluster we prefer to just let it go already,” Pernia, who is also the National Economic and Development Authority (NEDA) director general, told reporters on the sidelines of a forum late Wednesday.
The economic cluster includes the heads of NEDA and the Departments of Budget and Management, of Finance, and of Trade and Industry.
The decision aims to pressure Filipino farmers to be more efficient. “Competition is what we needed because when you protect the farmers they tend to be complacent. There’s no pressure. Competition always brings about pressure,” according to the NEDA chief.
Without a quantitative restriction on rice, the country may import the commodity at lower prices than the locally grown variety.
“Imported rice is cheaper. It’s going to be better for consumers when we import,” he said.
With the expiration of WTO waiver in June 2017, the Philippines has made a commitment to switch to a system of tariffs on rice that are in accordance with the WTO Agreement on Agriculture, Rajiv Biswas, Asia-Pacific chief economist at IHS Markit, explained.
“Therefore the Philippines does need to make a transition away from rice quotas towards a tariff based system under its international trade agreement with the WTO,” he said.
Since the Philippines is a net rice importing country, encouraging greater competition in the domestic market will help reduce the risk of rice shortages and may deliver benefits to consumers.
“The reforms could also help to encourage improved efficiency and higher quality in domestic rice production,” Biswas said.