THE Philippines is getting ready to import one million metric tons (MT) of rice this year to meet local demand amid falling stock levels while the Agriculture and Justice Departments debate the legal issues surrounding the move.
Agriculture Undersecretary Dante Delima said one million MT of rice will be allowed to enter the Philippines this year, the biggest volume authorized so far by the Aquino administration.
“Of the total volume to be imported this year, some 200,000 MT are part of the emergency stock requirement for last year, while the 800,000 MT will be part of the new importation plan to be announced by the NFA within this month,” Delima said, referring to the National Food Authority.
“The economic managers see it crucial that the volume should be imported to help stabilize prices and lower the inflation rate,” Delima told The Manila Times.
The NFA has yet to disclose the terms of the tender for this year’s importation.
In a legal opinion, Justice Secretary Leila de Lima said the Department of Agriculture (DA) should first lift the rice import quotas since the Special Treatment on Rice issued by the World Trade Organization expired in June 2012.
Agriculture Secretary Proceso Alcala, however, disagreed, telling the Justice Secretary that the WTO provisions on the lifting of rice import quotas are “already effective and should be complied with.”
In a two-page memorandum to the Justice chief dated January 21, 2014, Alcala argued that since the negotiations for the extension of the Quantitative Restrictions were allowed by the WTO beyond June 30, 2012 “even with the expiration of the extension period . . . the QR remains in place.”
He sought the opinion of the Department of Justice on whether the NFA could continue to implement the rice import quotas despite the June 2012 expiration of the Special Treatment on rice granted by the WTO.
De Lima is of the opinion that the Philippine government has given its nod to the WTO agreement, aware that the extension of its authority to impose QR on agricultural products like rice “shall only be by agreement after the conduct of negotiations.”
She stressed in her December 16, 2013 memorandum to Alcala that “since the Philippines’ request for the extension of its QR on rice until 2017 is still pending, there is thus no existing agreement” to extend the NFA’s authority to impose rice import quotas.
The DOJ chief noted that jurisprudence had already established that the WTO treaty “is no ordinary law.”
However, Alcala replied that in spite of the country’s continued implementation of the QR despite its expiration in June 2012, “no member-state has filed a dispute against the Philippine government on the continued implementation of the QR.”
“While we may be technically in breach of this [WTO] commitment, the actionable and formal declaration of such by the WTO can only be made if there has been a case filed,” Alcala told de Lima.
Negotiations over the extension of the QR will resume next month.
The Philippines, formerly the world’s biggest rice importer, had allowed the importation of a record 2.4 million MT of rice, but this was reduced to 860,000 MT in 2011. This was further trimmed down to 500,000 MT in 2012.
Last year, Manila approved 205,700 MT of rice imports under the omnibus minimum access volume for rice, plus the 500,000 MT of rice from Vietnam. The additional volume of rice was meant to replenish the country’s buffer stock following continuous drawdowns for relief operations particularly for Typhoon Yolanda victims.
Alcala said last week that any importation this year will be done under a government-to-government deal.
Only Cambodia, Thailand and Vietnam have existing rice purchase agreements with the Philippines at present.
But with the massive volume needed before the start of the lean season, the NFA may need private-sector participation as supplies in government and private coffers continue to decline.
The country’s total rice stock inventory as of January 1 was pegged at 2.12 million MT, or 14.7 percent lower than the previous month’s inventory of 2.49 million MT and 15.8 percent below the 2.52 million metric tons record in 2013.
During the period, stock levels in commercial warehouses and in the households dropped by 22.8 percent and 11.8 percent, respectively, compared with the December 1, 2013 rice stock inventory. Also, stock levels at NFA depositories, of which 43.8 percent were imported rice, fell 8.4 percent.
Year-on-year, stock levels in households, commercial warehouses and NFA depositories declined by 3.2 percent, 6.2 percent, and 53.7 percent, respectively.
Earlier reports quoting the National Economic Development Authority (NEDA) said the higher prices of rice helped push inflation up to 4.1 percent in February 2014, from 3.4 percent a year earlier.
NEDA Director General Arsenio Balisacan however said the supply outlook for rice in the coming months is “quite favorable,” suggesting that prices of the grain may drop in the coming months.
Balisacan has been pushing for the importation since the early part of 2013 to correct the rise in prices and prevent a possible shortage.
Agriculture Undersecretary Delima, on the other hand, said that they have agreed with the recommendation of the economic managers to import rice because of a shortfall in sufficiency targets and the unusual withdrawals in typhoon-hit areas.