The Rice Tariffication Law,

explained
With the Rice Tariffication Bill (Senate Bill No. 1998)
recently enacted into law by President Rodrigo Duterte, as
confirmed by the rice economy and its local farmers are
expected to be affected, for better or worse, and they’re
bracing for the impact.
Here’s everything you need to know about the Rice
Tariffication Law or Republic Act 11203.
Tariff:
a tax or duty to be paid on a particular class of
imports or exports
Group I
When was it signed?

Duterte signed the bill into law on Feb. 15, according to

the Official Gazette, and the law will take effect on Mar. 5,
according to the Department of Finance. The law’s
implementing rules and regulations will be enact
Agovernment gazette (official
gazette, official journal, official newspaper, officialm
onitor or official bulletin) is a periodical publication that
has been authorised to publish public or legal notices.
Group II

Why was it signed?

Since October 2018, Duterte declared the issue as

“urgent” due to price hikes that caused rice to hit P70 per
kilo last year. Finance Undersecretary Tony Lambino
predicts that the law will cut rice prices by P7 per
kilo. Bangko Sentral ng Pilipinas projects that this will
also cut inflation by 0.6 percent.
Group III
What does Duterte have to say?
There is a need “to address the urgent need to
improve availability of rice in the country, to prevent
artificial rice shortage, reduce the prices of rice in the
market, and curtail the prevalence of corruption and
cartel domination in the rice industry.”
What will the law do?

The law essentially allows for the liberalization of rice

imports. It will remove the previously placed quota on
rice imports, permitting traders to import a near-
unlimited quantity of rice.
Group IV
How will it work?

In the basic rules of economy, the law of supply and

demand will dictate market prices. By allowing more
competitors to enter the rice market, the law will lower
the price of rice by increasing supply.
Group V
How much are the tariffs?
35% from the Association of Southeast Asian Nations
(ASEAN); 40 percent from non-ASEAN countries if
imports are below 350,000 metric tons; and 180 percent
if imports are from non-ASEAN countries and above
350,000 metric tons.
Where will the tariffs go?

The taxes will go to a Rice Competitiveness

Enhancement Fund (RCEF), which will allocate the
revenue to programs for mass irrigation, rice storage,
and research initiatives.
Group VI

Who will it impact?

Local farmers are expected to be impacted the most as
the removal of quantitative restrictions will pit them
against foreign competitors. The National Food Authority
(NFA) will also be directly affected as the law will remove
various functions from their role
in food importation and distribution.
Group VII
How will local farmers be compensated?
The RCEF is expected to allocate P10 billion annually
to the support of Filipino rice farmers over a six-year
period. This will be done through the following fund
allocations: 50 percent on rice farm machinery and
equipment, rice cooperatives, and local government
units; 30 percent on rice seed development,
propagation, and promotion; 10 percent on rice credit
assistance; and 10 percent to rice extension services.
Group VIII
Is it a good move in the long run?

Technically, it will prevent price hikes in the future as competition is a

healthy component for the economy. Senate Committee on
Agriculture and Food Chairperson Cynthia villar concurs, “With the
expiration of the quantitative restriction on rice importation, this is a
very important piece of legislation, which will help our farmers
improve their profitability and competitiveness.”
Also in favor of competition, Panelo insists the liberalization of the rice
market will promote production. “Well, ‘pag ni-liberalize mo naman eh
magkakaroon ng competition in the market. So magpapababaan sila
ng presyo, otherwise hindi sila mabibili, hindi ba? Kaya nga—law of
supply and demand iyan eh,” he said
Rice Tariffication Law's Rice Competitiveness
Enhancement Fund, or RCEF, a PhP10-billion fund
that will help farmers transition to a new rice regime. ...
“PhP 5 billion was released in December 2018 to help
protect farmers through the National Rice Program.
Group IX

What do the farmers have to say?

Kilusan ng Magbubukid ng Pilipinas considers the law as a
“death warrant” to the local rice industry as it would open the
floodgates to foreign industries that would overpower or “wipe
out” local rice farmers. KMP estimates that 500,000 of a total
of 2.4 million rice farmers will be negatively impacted by the
law. The organization states that only through investing and
boosting local production will the Philippines achieve stable
rice prices and supply.
Group X
What does NFA have to say?

With restrictions removed, NFA will lose its power and

functions in rice importation. Their role will now be limited to
maintaining a buffer stock of rice for emergency situations.
They will not be permitted to manage the licensing of
importers and traders. Some 400 NFA employees expected
to be laid off as the law will also move NFA under the
Department of Agriculture.
Group XI

What does this mean for the agriculture industry now?

Now that it has been rendered a law, expect the aftermath

of its implementation to come in the following months. Local
farmers will be affected by the introduction of more foreign
competitors and how they fare in the face of that
competition will depend on the RCEF that the law has put
into place.