Skip to main content

Advertisement

Advertisement

Business

Philippines steps up inflation fight with food tariff cuts

Philippines steps up inflation fight with food tariff cuts

A vendor wearing a face mask for protection against the coronavirus disease (COVID-19) sleeps in a stall selling rice at a public market in Quezon City, Metro Manila, Philippines, January 5, 2021. REUTERS/Eloisa Lopez/File Photo

MANILA: The Philippines said on Tuesday (Jun 7) it has extended until the end of 2022 an executive order that lowers the tariff rate for rice imported from outside Southeast Asia to 35 per cent from 40 to 50 per cent.

Racing to tame inflation, the government also cut tariffs on corn and pork and announced the temporary removal of a 7 per cent duty on coal imports, a key fuel in power generation.

The modified tariff schedule, initially issued last year and extended by President Rodrigo Duterte last month, was made public on Tuesday after data showed inflation in May at the highest since November 2018 and above this year's 2 to 4 per cent target band.

The Philippines, which is forecast to be the world's second-largest rice buyer this year after China, is projected to import 2.8 million tonnes for marketing year 2022/23 to cover a domestic shortfall, according to the US Department of Agriculture.

The reduction brings the tariff on rice in line with the prevailing 35 per cent rate for imports from the country's Southeast Asian neighbours.

The Philippines remains heavily dependent on Vietnam for its import requirements and also buys some volumes from Thailand.

It seldom imports from India, the world's top exporter, but Manila has recently floated the idea of diversifying its sources for cheaper supply, with Indian rice as an alternative.

Manila's decision to keep rice tariff rates low comes at a time when Thailand and Vietnam are planning to raise prices, although a top Thai industry official had raised questions over the plan's viability.

Corn tariff rates have been cut to 5 to 15 per cent, effective until end-2022 and reverting to 35 to 50 per cent next year, while tariffs on pork products will remain at a lower 15 to 25 per cent until year-end and revert to 30 to 40 per cent next year.

Source: Reuters/vc

Advertisement

Also worth reading

Advertisement