₱1-B revenue lost from tariff cuts ‘for nothing’


THE national government lost at least P1 billion in revenues from the reduction of rice tariffs since 2021 without any concrete benefits to Filipino consumers, the Federation of Free Farmers (FFF) claimed.

The FFF presented its arguments during the Tariff Commission (TC) hearing on Monday regarding the proposed extension of the lower tariff rates on rice, pork and corn on by the government’s economic development group (EDG).

Based on its computations using government data, the FFF said the national government’s foregone revenues from the lowering of rice tariffs to 35 percent for non-Asean imports amounted to P1.013 billion.

The FFF presentation showed that the national government lost P278 million from June to December 2021, when the lowering of rice tariffs was first implemented. It was followed by P565 million in foregone tariffs last year and another P170 million from January to September this year, according to the FFF.

From June 2021 to September 2023, the FFF said the national government collected a total of P1.796 billion tariffs from imported rice from non-Asean sources. If the tariff on rice imported from non-Asean countries was not lowered to 35 percent, the government should have collected about P2.809 billion, the FFF added.

Reductions ‘for nothing’

“So, we reduced the rice tariffs for nothing, for nothing,” FFF National Manager Raul Q. Montemayor said.

Montemayor pointed out that the initial argument in lowering the most favored nation (MFN) rates on rice imports was to diversify the country’s import sources to non-Asean suppliers like Pakistan and India.

However, Montemayor claimed that this goal did not materialize to date. Citing computations of Customs data, Montemayor said the share of non-Asean rice to the country’s overall imports have been between 2 percent and 6 percent since the tariffs were lowered.

In 2021, non-Asean rice imports accounted for 2 percent of total imports of the Philippines while in 2022 it increased to a 6 percent share, according to FFF. Montemayor said from January to September imported rice stocks from non-Asean had a 2-percent market share of the overall rice imports.

“Were we able to significantly diversify imports? We did not. Even without the export ban, Indian exports to the Philippnies are few,” Montemayor said.

“We remain basically very dependent on Asean [sources] like Vietnam, Myanmar and Thailand. Was it worth the effort and the cost to reduce the tariffs on rice? I do not think so,” he added.

Citing Customs data, Montemayor said Asean rice exporters accounted for 98 percent of the country’s total rice imports in 2021, 94 percent in 2022 and 98 percent from January to September.