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By Chino S. Leyco, Reporter
Government may decide to cut rice
tariff up to 12 percent, but commercial importers fear this will not
give them a bigger margin and may choose not to import at all,
officials said Thursday.
Finance Secretary Margarito Teves
said at zero tariff, rice will be retailed at P34 per kilo,
significantly higher compared to state-subsidized rice sold by the
National Food Authority at P18.25 a kilo.
He cited that with the current
$700 per metric ton price of rice in the world market, importers
might not bite the government’s offer.
“At about 12 percent [tariff],
it would be revenue neutral. Lower than that, may impact na sa amin
[it will impact on us]. We’re faced with a situation where we have
to make a quick decision,” Teves told reporters.
Initial Finance department
computation suggests that at about $700 per metric ton, importers
will find it extremely difficult to make money, even if the
government removes the entire tariff duty.
Trying to see if government can
use the formula adopted for oil products, Teves said the situation
in rice is different. Tariff reduction for rice will have to undergo
a very long process with the Tariff Commission. It may even require
public consultation, especially with local farmers.
The potential rice shortage seen
by government is assuming critical dimensions, though.
“There’s a need to quickly
bring in that rice,” Teves said. “There’s a process involved
in reducing the tariff at whatever level. We go to a hearing, and
that includes farmers. We have to convince them that there’s a
reason for reducing tariff. The process is longer. It could be
cumbersome.”
What’s important now, he said,
is how to dampen speculations that there is a crisis already as it
results in public and trader perception that rice will be scarce in
days to come.
“There is more temptation to
hoard it, therefore [precipitating] or [contributing] to a rise in
price. Whereas if consumers and traders feel that rice is
forthcoming, it might also encourage them to [tell] themselves
[that] if the rice will come, I better dispose [of] my rice
[quickly]. Otherwise, I might lose because I held my rice longer,”
he said.
“If you prolong it, and you
don’t make the decision quickly, each day there’s pressure on
the prices. If it’s the present scheme, which is not to bring down
tariff—simple, the government just have to import. It’s a matter
of sourcing,” Teves explained.
The Finance secretary said the
only solution is to convince the private sector to import more rice.
However, he said that they perceive that if an importer enters the
business now, they will not make money.
“Even if you remove [tariff
duty], will consumers buy rice at a [higher] price? Can the
consumers absorb it?” Teves asked.
It will be more practical to
import rice now even at about 50-percent duties because the major
consideration is to bring in rice quickly, he said.
“Right now, the allocation
budget, at about P7.5 billion, will take care of it,” Teves said.
The National Food Authority has
programmed a 2.7 million metric ton rice importation this year, and
600,000 metric tons will be imported by the private sector.
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