News Release

Substantial RCEF collection seen despite calibration of 2024-2028 tariff rates

The government can still collect substantial import duty for the Rice Competitiveness Enhancement Fund (RCEF) despite the National Economic and Development Authority (NEDA) Board’s approval of the Comprehensive Tariff Program which aims to calibrate the current tariff rates from 2024 to 2028.

This was assurance made by NEDA Secretary Arsenio Balisacan who explained on Tuesday that the RCEF was put up to improve palay farmers’ competitiveness and income amid the liberalization of the Philippine rice trade policy that lifted the quantitative restrictions on rice imports and replaced it with tariffs.

The NEDA Board, chaired by President Ferdinand R. Marcos Jr., approved the Comprehensive Tariff Program during its 17th meeting in Malacañang in Monday.

“The remaining tariff is still quite substantial; fifteen percent pa rin iyan. So whatever imports, if those imports are coming in at still elevated high prices, it’s still quite a substantial tariff revenue for the RCEF,” Balisacan said in a press briefing at the Palace.

“Plus, as I said earlier, the government has substantially increased the budget for the Department of Agriculture. The budget for 22, 23, 24, the average, 69 percent increase, compared to previous years. So that’s the highest increase you can find in any of the sector in so far as the government allocation of the budget is concerned,” he said.

Balisacan said the administration’s approach is two-pronged – provide some tariff cover for Filipino farmers at 15 percent, and also give them with a lot of the services that will enhance their productivity, which is the government’s short-term, medium-term, and long-term objectives.

The government economic planners believe the collection is not exactly lost as a result of the lower tariff rate that would enhance economic activities and improve the welfare of households, particularly the most vulnerable groups, Balisacan said, stressing the government will still generate revenues.

“We note that even at the reduced rate of 15 percent, the rice sector continues to enjoy comparatively high tariff protection from competitive imports as the tariff is higher than for the 80 to 90 percent of the total 11,484 tariff lines under the ASEAN Tariff Nomenclature 2022,” Balisacan said.

The NEDA Board agreed to reduce rice duty rate to 15 percent for both in-quota and out-quota rates from 35 percent until 2028 to low the price of rice further and make it more affordable especially to poor households.

Rice, which is one of the most critical components of Filipino households consumption basket, contributed about two percentage points or over 50 percent to the headline inflation, based on the latest inflation reports of the Philippine Statistics Authority (PSA) in the past three months.

Reducing rice tariff is expected to bring down rice prices for consumers while also supporting domestic production through tariff cover and increased budgetary support to improve agricultural productivity especially as global rice prices remain elevated, Balisacan said.

“Upward price pressure for rice have been driven by the effects of the El Niño phenomenon that are felt worldwide as well as the increasing demand given our steadily growing population and economy,” he added. PND