MANILA, Philippines – If lawmakers fail to pass the rice tariffication bill, inflation would be slightly higher for 2019, according to Budget Secretary Benjamin Diokno.
In a media briefing on Wednesday, September 5, Diokno explained that the contribution of rice to inflation would decline if the bill is passed.
"If lawmakers fail to pass rice tariffication, we may be operating under a slightly higher inflation rate, even for 2019. Currently, the contribution of rice to inflation is 0.7%," Diokno said, referring to July figures.
Inflation or the increase in the prices of goods climbed to another 9-year high, hitting 6.4% in August.
The inflation projection for 2019 is set to be within the 2% to 4% range. If the tariffication measure is not passed, Diokno estimates this could contribute roughly 0.7 percentage points to the target, which means it could reach 2.7% to 4.7% next year.
The proposed tariff system, filed as House Bill (HB) No. 7735 or the Revised Agricultural Tariffication Act, amends the existing law.
This existing law, which is more than two decades old, allows the National Food Authority to monopolize rice importation.
Diokno reiterated the economic managers' stance that the preference is still tariffication, as replacing the quantitative restriction (QR) on rice would lower prices and increase revenues for agricultural programs.
"By tariffication, instead of QR, the price of rice will decline by about P4 to P7 that may be partially felt in the 4th quarter, but the full impact will be felt next year," the budget chief said.
Diokno said they are confident that the measure will be passed.
Earlier this month, lawmakers approved HB 7735 on 2nd reading. The bill will have to be passed on 3rd and final reading to hurdle the House of Representatives.
The Senate version of the measure remains pending before the agriculture and food committee. – Rappler.com