March 09, 2015

09/03/2015: Lifting of cap on Phillippine rice imports pushed

The Philippines’ chief economist is pushing for the removal of the import cap on rice to bring down prices and make the commodity more accessible to the poor, The Inquirer reports.

Economic Planning Secretary Arsenio M. Balisacan, who is also director general of the National Economic and Development Authority (Neda), partly blamed high rice prices for the increased poverty incidence recorded during the first half of 2014.

The Philippine Statistics Authority (PSA) reported last Friday that the poverty incidence among individual Filipinos rose by 1.2 percentage points year-on-year to 25.8 percent during the first six months of last year. The poverty incidence among Filipino families likewise inched up by 1.2 percentage points to 20 percent in the same period.

Balisacan pointed out that despite a 6.4-percent year-on-year increase in per capita income during the first semester of 2014, high food prices, especially of rice, eroded the spending capacity of poor Filipinos. Rice accounted for a fifth of low income families’ budgets, the Neda chief noted.

As the government imposes a quota on rice imports, domestic prices are vulnerable to shocks resulting from meager supply.

During the first half of last year, rice inflation jumped by a faster 11.9 percent from just 1.7 percent in the previous year as lean harvests on top of meager importation resulted in a tight supply of the commodity.

The World Trade Organization last year allowed the Philippines to extend its quota system or so-called quantitative restriction (QR) until 2017 in a bid to buy time for local farmers to prepare for free trade in light of the government’s goal of achieving self-sufficiency in rice production.

Read more HERE.

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