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Philippines cuts rice tariffs to ensure food security, fight inflation

Philippines cuts rice tariffs to ensure food security, fight inflation

FILE PHOTO: Farmers work in a rice field in the mining town of Santa Cruz, Zambales in northern Philippines on Feb 8, 2017. (Photo: REUTERS/Erik De Castro)

MANILA: Philippines President Rodrigo Duterte reduced the tariff for imported rice on Saturday (May 15) to ensure food security and protect consumers in the world's biggest importer of the grain.

The Southeast Asian nation, which is battling elevated inflation, took into consideration the increase in global rice prices and uncertainties in local rice supply, the president's office said in a statement.

In an executive order, Duterte cut the Most Favoured Nation (MFN) tariff rates on rice to 35per cent from 40per cent for in-quota purchases and 50 per cent out-quota volume for one year "to diversify the country's market sources, augment rice supply, maintain prices affordable, and reduce pressures on inflation."

In January, the agriculture ministry projected the country to import at least 1.7 million tonnes of its staple food this year to fully cover domestic requirements. It buys more than 90 per cent of import requirements from Vietnam.

The Philippines' paddy rice output rose 2.6 per cent to a record 19.3 million tonnes last year, government data showed. The agriculture ministry targets unmilled rice output at 20.5 million tonnes this year.

More than 20 tropical storms hit the Philippines annually, with the strongest typhoons destroying crops like rice and corn in the second half, the peak harvest season.

Duterte also tweaked MFN tariff rates for pork products to 10 per cent for in-quota purchases and 20 per cent for out-quota volumes for the first three months, and 15 per cent for in-quota and 25 per cent for out-quota from the 4th to the 12th month.

The tariffs were higher than previously-announced rates after opposition by the local hog industry.

The government is rushing to address the shortage of pork supply, hit hard by African Swine Fever outbreaks, that has pushed inflation to the high end of the 2 per cent to 4 per cent target.

Source: Reuters/nh

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