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By Darwin G. Amojelar,
Reporter
The World Bank on Wednesday
appealed to the Philippine government to cut the import tariff on
rice to reduce the cereal’s price in the domestic market.
“It is very much welcome to
open the importation of rice to private sectors. The 50-percent
tariff rate keeps the price high,” Bert Hofman, World Bank country
director for the Philippines, told reporters.
Hofman noted that lowering tariff
is beneficial for both consumers and for government.
“[Lowering tariff] means lower
rice price and more tax revenues [for the government],” he said.
“If tariff is low enough and
the private sector will come in, they [private sector] will actually
pay cash. So, the [government] treasury will be better off,”
Hofman added.
The World Bank official said
rather than subsidizing, the government should lower the price of
rice for everybody.
Earlier, the Department of
Finance said it was looking at cutting rice tariff up to 12 percent,
but the agency said importers might not bite the government’s
offer.
Initial Finance department
computation suggested 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.
The department 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.
Felipe Medalla, an economist and
a former Socioeconomic Planning secretary, had proposed to open rice
importation to the private sector as a long-term solution to address
a possible rice crisis in the country.
Medalla said the government is
losing money because it buys rice at a higher price and sells it low
to consumers.
He said he had heard from an
official of the food authority that there will be losses of P100
billion by 2010 because of expensive rice importations.
The Bureau of Customs also on
Wednesday warned government leaders that slashing the tariff on rice
importation will have a serious effect on the revenue-generating
efforts of the government.
Customs Commissioner Napoleon
Morales said slashing the tariff on rice imports down to 10 percent
as mulled by the government will have a negating effect on their bid
to collect more taxes.
“If they reduce that to 10
percent . . . what will be left? We are already being weighed down
by the strengthening of the peso that is close to P41 per $1,”
Morales told reporters.
The Customs commissioner said
they have made a request with the Finance department for the
reassessment of the bureau’s P254-billion revenue target for the
year.
The 2008 target was made on the
assumption of an exchange rate of P46 to $1 last year, but the peso
strengthened early this year to P45 against the greenback.
“I don’t have the figures
with me right now, but I will give you a conservative estimate. Rice
importations from the NFA account for roughly P7 billion annually
based on the 50-percent tariff,” Morales said.
Secretary Arthur Yap of the
Department of Agriculture proposed cutting the tariff on Tuesday,
citing increase in price of rice by 2.4 percent, or double that of a
year ago.
He said traders will be required
only to pay a 10-percent fee on their importations instead of the
50-percent tariff after they are accredited by the National Food
Authority.
The NFA has been tapped to charge
the fee so that the importer on record will still reflect the
government agency to ensure that they can avail of the government
subsidy under the Tax Expenditure Funds.
--With Anthony Vargas
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