Highlights of the law

For decades, the rice market was dominated by the National Food Authority (NFA), whose monopoly power over imports and prices led to Filipino consumers paying high rice prices, government subsidizing NFA losses, and rice farmers remaining poor. Although meant to stabilize rice prices, the system reached a crisis point in 2018 when a severe rice shortage became a major driver of inflation, which rose by a factor of 10. The effects were felt disproportionately by the poor, who spend most of their household budget on basic food items.
 
This provided the impetus to pass Republic Act No. 11203, otherwise known as the Rice Tariffication Law, in February 2019. After more than four decades of battles to reform the rice sector, the RTL ended NFA’s monopoly, removed quantitative restrictions on rice imports, and replaced them with a 35 percent import tariff. This allowed an influx of cheap rice from abroad, which reduced and stabilized rice prices for consumers.
 
One major concern about the new law was its potential impact on domestic rice farmers. Even with the 35 percent tariff, imported rice would lower domestic prices and hurt farm income. Anticipating this, the RTL included a safety net for rice farmers, the Rice Competitiveness Enhancement Fund (RCEF), which would use money from the import tariffs to help domestic rice farmers compete with the imported rice. A total of PHP 10 billion per year is earmarked for RCEF. It will aid farmers with mechanization, seed distribution, credit assistance, and technical education and skills development to improve productivity in the rice industry.

 

Source: asiafoundation.org 

​

To further understand the Rice Tariffication Law, please visit this link.