Manila, April 9 - The Philippines is maintaining its rice import quota despite surging prices in both local and global markets, Agriculture Secretary Arthur Yap said Wednesday.
"We haven't lifted the quantitative restriction on rice (imports). It is in place," said Yap, refuting reports the government has removed the import restriction to allow the entry of more rice and ease domestic prices.
Yap said the import quota for this year still stands at 2.1 million metric tons, although private traders are being encouraged to bring in rice from overseas.
"We can easily increase the quota if needed," he added.
The Philippines sets limits on the amount of rice that can be imported in a year to protect local farmers from an influx of cheaper grain.
To encourage shipments by the private sector, the government is effectively removing duties on rice imports, Yap said.
Instead, private traders will only have to pay a service fee of PHP2.00 per kilogram of rice imported. This fee translates to about 7% import duty instead of the regular tariff of 50%.
The 50% tariff normally charged on rice imports will be absorbed by a tax expenditure subsidy given by the finance department to the National Food Authority, a state-owned grain trading firm.
But Herculano Co, president of the Philippine Confederation of Grains Association, said the government should limit imports by the private sector to low grade varieties if the shipments are to help curb rising domestic prices.
"The import should be limited to ordinary rice, otherwise only the private importers will benefit from the exercise," he said.
Meanwhile, the government is considering an increase in both its buying support price for paddy as well as its subsidized selling price of rice, said Yap.
Such a move could further boost retail prices, which have increased by around 40% from the beginning of the year, prompting consumers to hoard rice.
Only last week, the NFA increased its buying support price by 40% to PHP17/kg.
Such a buying price will be maintained only until May, Yap said, adding the government may further increase its buying price for the wet season crop, which will be planted starting June.
The NFA is also considering its selling price for rice, currently pegged at PHP18.25/kg, or about 50% lower than prevailing market rates, said Jessup Navarro, the NFA administrator. "We're considering all these possibilities in consultation with all sectors involved," he said, adding the government needs to balance the interest of both the rice farmers and rice consumers.
Currently, rice inventories are estimated at around 58 days worth at a daily consumption base rate of 33,000 tons.
"We have enough rice, there is no shortage," Navarro added.