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By Chino S. Leyco, Reporter
The Finance department plans to increase
tax-expenditure subsidy given to the National Food Authority to
preempt a rice shortage—even as the Trade secretary insists there
is no food crisis.
Finance Secretary Margarito Teves said the
government plans to increase tax subsidy to the authority amid the
skyrocketing rice prices in the world market, which may result in a
supply shortage in the Philippines.
The Finance department will discuss options to
address the looming shortage with Agriculture Secretary Arthur Yap
and other economic managers before taking action, Teves said.
He added that some subsidy increases have
already been allocated for the National Food Authority, adding it
can borrow from various institutions like the state-run LandBank of
the Philippines.
“Prices of rice have been growing faster than
the adjustment in the domestic price, so there’s a net requirement
needed by the NFA,” Teves said.
The government will come up with the subsidy
figure within the next two weeks, he added.
“I’m not sure whether that’s really
productive. We might consider the tax expenditure subsidy, instead
of the reduction of the tariff,” Teves said referring to the
suggestion of just lowering the tariff amid high prices of rice.
Finance Undersecretary Gil Beltran, however,
said the Agriculture department can appeal for much lower tariffs on
rice and corn on the back of skyrocketing commodity prices, but
likewise added that the move should first go through public
consultation.
“Farmers may not like higher rice
importation,” Beltran said, adding that his “advise to Secretary
Yap is to have a public hearing on this before making an appeal.”
By lowering the tariffs on the two commodities,
Beltran said it will translate to higher importations and will mean
more revenue proceeds for the government.
To date, rice and corn tariffs are at 50 percent
and 40 percent, respectively.
With the current situation, the country is
expected to exceed the target 2 million metric tons of imported rice
this year, and increase government allotment for rice procurement
abroad amounting to between P22 billion and P24 billion.
In the previous tender last week, the price of
imported rice was at $708.04 per metric ton, higher compared with
the $430 per metric ton in January this year.
Last year, the Finance department already
granted the National Food Authority a tax expenditure subsidy to
cover 50-percent tariff on rice. The tax expenditure subsidy is
allocated in the budget of the national government.
But sources from the Development Budget
Coordinating Committee, an inter-agency body tasked with setting the
country’s macro-economic goals, said the grain agency has a
programmed P7-billion tax subsidy, or half lower compared with the
P14 billion last year.
The grains agency needs government assistance to
support its mandate of buying high from farmers while selling low to
consumers.
Enough rice supply
The Department of Trade and Industry has assured
the public of ample supply of basic commodities, amid the worldwide
crisis in rice supply.
Trade Secretary Peter Favila, in a recent
briefing, said the government is closely monitoring prices and
supply of the goods in the market.
“There is no need for alarm,” he said.
“There is enough supply of basic goods, such as rice, meat,
vegetables, canned goods and other basic necessities.”
As for rice, Favila cited his conversation with
Secretary Yap, saying, “The government is on top of the situation
in ensuring that prices are affordable and there is an adequate
supply in the market.”
“The government is closely watching rice
supply and that importation is being resorted to supplement the
country’s harvest,” Favila said.
-- With Katrina Mennen A. Valdez
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