Philippines stretches tariff cuts on imported rice to mitigate inflation threats

PHILIPPINES- President Ferdinand Marcos Jr. has given the green light for the extension of reduced tariffs on rice and other essential food items until the end of 2024, to combat rising inflation and address potential challenges posed by looming dry weather, according to a recent statement from his office.

The initially approved modified rates, implemented in 2021, had already been prolonged earlier in 2023 due to persistent high inflation. 

President Marcos emphasized the necessity of further extending the reduced tariff rates on rice, corn, and pork to maintain stable and affordable prices, safeguarding the nation’s food security.

“The present economic condition warrants the continued application of the reduced tariff rates on rice, corn, and (pork) to maintain affordable prices to ensure food security,” stated President Marcos in the official statement.

In November 2023, inflation stood at 4.1%, marking a second consecutive month of easing. However, the average inflation rate for the first 11 months of 2023 reached 6.2%, significantly exceeding the Philippine central bank’s target range of 2%-4% for the year.

President Marcos emphasized that the extension of modified tariffs is crucial in ensuring the affordability of rice, which is a staple food in the country, corn, and meat products, especially in light of the anticipated El Nino dry weather phenomenon in early 2024 and the ongoing threat of African Swine Fever.

Under the new executive order extending the modified tariff rates, the tariff rate for rice will continue to be set at 35%. Additionally, import levies on corn will be maintained at 5%-15%, while pork products will face import levies ranging from 15% to 25%.

The Philippines ranks 8th in global rice production, and exports most of its rice to Middle Eastern countries, which will not be seeing increasing imports from this rice producer in 2024. 

The decision to extend these tariff cuts reflects the government’s commitment to shielding consumers from the impact of economic challenges and external factors affecting the agricultural sector. 

President Marcos emphasized that these measures are a proactive response to uncertainties, aiming to provide stability and affordability in crucial sectors of the economy.

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