Finance Secretary Carlos Dominguez III has voiced optimism that the Congress could pass soon enough the rice tarrification bill now that President Duterte has declared this proposal to liberalize rice imports as an urgent and priority measure to help ease inflation and bring down prices of the food staple by as much as P7 per kilo.
Dominguez said liberalizing rice imports through the passage into law of the rice tariffication bill now pending in the Congress is vital in helping low-income households cope with inflation, given that rice accounts for 20 percent of their consumption.
“Along with a national ID system, the passage of the rice tariffication bill will complement the social mitigation measures we are implementing now to further ease the impact of inflation on poor households,” Dominguez said.
The House of Representatives appropriations committee has already approved the funding provision for the consolidated version of its rice tariffication bill.
The counterpart version of the bill in the Senate is still being discussed at the committee level.
Based on estimates by the Bangko Sentral ng Pilipinas (BSP), allowing cheap rice imports with tariffs will immediately lower the inflation rate by 0.4 percentage points.
In his 3rd State-of-the-Nation Address (SONA), the President said rice tariffication was among the long-term solutions that the government is working on to lower inflation, provide farmers with additional resources and reduce rice prices by up to P7 a kilo.
“We need to switch from the current quota system in importing rice to a tariff system where rice can be imported more freely,” the President said in his July 23 SONA. “I ask Congress to prioritize this crucial reform, which I have certified as urgent today, “he added.
In his SONA, the President reiterated his commitment to a comprehensive tax reform, and called on the Congress “to continue the job,” starting with the approval of his administration’s proposed reforms in the corporate tax system and the modernization of fiscal incentives.
The Chief Executive described such reforms, which comprise Package 2 of his tax reform program, as “urgent,” and said he hopes to sign its bill into law before the year ends.
Dominguez said the Department of Finance (DOF) will “extend all the technical support that Congress needs in heeding the President’s call for the passage of Package 2 this year, especially for the benefit of our small and medium enterprises.”
“President Duterte has always been the principal advocate of inclusive growth and of the means to achieve it. Tax Reform is a key tool to reach that objective,” Dominguez said.
“We believe that the President’s strong statements in the SONA will help allay whatever uncertainty is left about the imperative for reform,” the Finance chief said. “The administration is serious about tax reform, and it is definitely serious about having Package 2 signed by the end of the year.”
He said the DOF is (committing) itself to the President’s stated deadline” as “tax reform will bring about growth with equity and heightened productivity that will help us attain our aspiration to be a high-middle-income country by 2022, lifting one million Filipinos from poverty every year.”