November 21, 2024 | 12:00am
MANILA, Philippines — The government may consider reverting rice tariffs to its previous rate of 35 percent if the peso strengthens below the 57 to $1 level, Agriculture Secretary Francisco Tiu Laurel Jr. said.
Tiu Laurel said a favorable exchange rate is one of the factors to be considered in adjusting the present rice tariff rate of 15 percent.
“55 (to) 56,” he told The STAR when asked what would be the favorable exchange rate that would factor in the adjustment of the country’s prevailing rice tariff rate.
Foreign exchange concerns emerged recently after Sen. Cynthia Villar disclosed that the National Economic and Development Authority (NEDA) is in the view of maintaining the current lower rice tariff rate until the first review period next year to offset any detrimental effects of the weakening of the peso against the dollar.
Under President Marcos’ Executive Order 62, the reduced rice tariff rate of 15 percent must be subjected to regular review every four months to determine if there is any need to adjust the rate according to present market conditions.
“NEDA already conducted the review and they want to maintain (the lower tariff) until the next review, which is in February,” Villar said.
“NEDA’s reason was the exchange rate. Before, it was 55 (to a dollar), but today it is now 58 to 59, which could impact rice prices. That is why they want to continue with the lower tariff,” Villar added.
The average exchange rate applied on imported rice from January to October reached 56.95 to $1, 2.4 percent weaker than the average of 55.62 to $1 in the same period last year.
The peso closed at 58.81 to $1 on Nov. 19.
Bangko Sentral ng Pilipinas data showed that the average foreign exchange rate has been above 57 since May before averaging 56 to $1 in September.
However, the peso weakened last month posting an average exchange rate of 57.30 to $1.
Tiu Laurel earlier said he supports the position of the NEDA against modifying the tariff rates at this point, as more time is needed to realize the benefits of the economic measure.
“Yes, I share the same opinion since to see the real results, we need about six months since a lot bought palay at a high price of P35 (per kilo) from July to August of this year,” Tiu Laurel said.
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