By Adrian H. Halili
THE benefits of extending a low-tariff regime for rice, corn, and pork outweigh the costs to the economy of lower government revenue, analysts said.
Foundation for Economic Freedom (FEF) President Calixto V. Chikiamco said in a Viber message that allowing tariffs to rise to their former levels will result in “huge overall costs to the economy.”
A farmers group argued in a Tariff Commission hearing on Monday that the National Government gave up revenue of about P1.01 billion just from the lowered tariffs on rice.
In a presentation by the Federation of Free Farmers, National Manager Raul Q. Montemayor argued that the revenue foregone could have been used to help local farmers.
Mr. Montemayor added that the government could have collected P2.8 billion in revenue if rice tariffs on grain from all sources were not lowered to 35%.
He said that the National Government had only raised about P1.8 billion in tariffs from imported grain from non-ASEAN suppliers.
Rice tariffs are currently set at 35% for all imports, regardless of whether they fall within the minimum access volume (MAV) quota. Originally the 35% rate had applied only to rice from Southeast Asian countries.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said a “balancing act” is needed between lost revenue and the impact of higher tariffs on consumers.
“It is a delicate balancing act involving the interests of the general public… while also considering the losses on farmers,” Mr. Ricafort said in a Viber message.
Former Agriculture Secretary William D. Dar said that the government would need to track closely any production shortfalls in the coming year before deciding to extend tariff rates.
“The first major strategy is to boost local production… the government must have a scenario analysis (on the) level of production next year,” Mr. Dar said in text message.
“If such analysis indicates a shortfall, then it would lead you to recommend continuing with reduced tariffs on rice, corn and pork,” he added.
Executive Order (EO) No. 171, signed by former President Rodrigo R. Duterte, reduced the tariffs on the commodities to bring down prices and stabilize domestic supply.
Last year, President Ferdinand R. Marcos, Jr. signed EO 10 extending the lowered tariffs on the three commodities until Dec. 31, 2023.
Economic managers had earlier requested the Tariff Commission to investigate the possible extension of the tariff regime until Dec. 31, 2024.
The commission is expected to decide on its recommendation to the President next month.