Since the enactment of the Rice Tariffication Law (RTL) in 2019, the Philippines has undergone a dramatic shift in its rice importation policy, moving from strict import limits to a tariff-based system. This transition catapulted the country to becoming the world’s largest rice importer in 2019, with imports reaching 3.8 million metric tons by 2023. While the RTL has helped reduce domestic rice prices and curb inflation, it has also introduced significant challenges for local farmers.
Atty. Gilberto F. Lauengco, former Special Assistant to the Administrator of the National Food Authority and a key figure in crafting the RTL, explains that the Philippines has struggled to meet its own rice production needs.
“We have rarely ever efficiently produced enough rice for our needs. We can produce 70, 80, even 90%, but never a hundred,” he notes, referring to the country’s self-sufficiency ratio (SSR). “Whenever we talk about rice, our primary foodstuff, you have two sources: You import them, or you produce them. At this point, we cannot match 100%, so we have to rely on importation.”
Lauengco highlights the growing population and insufficient natural irrigation as major factors hindering the country’s ability to meet production quotas. Additionally, the Philippines’ commitment to World Trade Organization (WTO) agreements has played a role in these challenges. As a WTO member, the Philippines has been required to replace quantitative restrictions (QRs) on rice imports with tariffs to comply with international trade regulations. This policy shift has led to an unprecedented surge in rice imports, making the Philippines the world’s largest rice importer. This trend continues, with imports reaching approximately 2.9 million metric tons in 2021 and increasing to 3.8 million metric tons in 2023.
Under the tariffication system, the Philippines benefits financially while striving to keep rice prices high enough to protect local producers. Since the RTL’s implementation, the tariff rates have remained consistent: 35% for in-quota imports and 50% for out-of-quota imports. Lauengco points out that managing rice importation is a delicate balancing act. “If tariffs are set too high, rice prices can become prohibitively expensive. Conversely, if tariffs are too low, rice prices may fall, making it difficult for domestic producers to cover their production costs and recover their investments.”
The revenues generated from these tariffs are designed to be reinvested in the agricultural sector, with focus on supporting farmers. The Department of Agriculture has implemented various programs, including direct fund distribution, seed distribution, provision of farming equipment, training, credit support, and insurance and risk management, to help farmers become more resilient and competitive.
RTL has transformed the landscape of rice importation in the Philippines. It has also highlighted the complex balance between supporting local agriculture and managing international trade obligations. Not to mention the delicate issue of management of tariff incomes to better help the domestic rice-producing industry. According to Lauengco, with the careful management of the RTL, and some changes in how agricultural agencies operate, there is a clear path toward rice sustainability in the Philippines.
