Featured News

THE Federation of Free Farmers (FFF) claims that importers pocketed over P5 billion in extra profits from the rice tariff cut.

The cut was applied after President Ferdinand R. Marcos Jr. issued Executive Order (EO) 62 last June. The issuance of EO 62 effectively reduced rice tariffs to 15 percent from 35 percent as Marcos hoped retail prices could be reduced between P5 and P7. The Chief Executive’s order took effect on July 7. 

However, the FFF said retail prices of both regular and well-milled rice declined by only P0.40 per kilo, based on data from the Philippine Statistics Authority (PSA). This was significantly below projections that prices would fall by as much as P7 per kilo due to lower duties, according to the organization.

The FFF calculated that rice importers decreased their tariff payments by P6.70 per kilo, assuming a landed cost of $600 per metric ton (MT) and an exchange rate of P56 per dollar. 

The FFF added that total tariff savings from the more than 800,000 MT that arrived between July and mid-September amounted to over P5 billion.

“The fact that retail prices hardly moved means that importers, wholesalers and retailers pocketed most of the P5 billion in savings. They, and not the consumers, have been the real beneficiaries of the tariff cuts,” FFF National Manager Raul Q. Montemayor was quoted in the statement as saying.

The group also debunked claims that importers were withholding stocks in ports of entry or warehouses while waiting for prices to rise.

“Rice prices may decline beginning late September, as farmers have begun harvesting their main crop. Importers will logically try to sell now, when prices are still high. But instead of forwarding their savings to consumers, they are maximizing their profit margins,” Montemayor said. 

Meanwhile, Agriculture Secretary Francisco Tiu Laurel Jr. maintained that rice prices would not immediately decline, noting that it was only at the end of August that excess stocks bought at higher tariffs were exhausted. 

According to Laurel, Filipinos were consuming this month rice from palay, which local traders bought at a price of P29.30 per kilo in the first half of the year. 

“’Yung P29.30 per kilo na palay na nabili nang January to June, ang equivalent na presyo niyan [sa retail] P56. Hindi pa na uubos yan,” Laurel told reporters on the sidelines of an agriculture forum in Makati City on Thursday. 

The Agriculture Secretary was expecting these stocks to decline by mid-October.

“Siguro makuha natin at least less P5 [ang retail prices] by January,” Laurel said.

Source : businessmirror