By means of John Victor D. Ordoñez, Reporter
PHILIPPINE President Ferdinand R. Marcos Jr. on Monday signed a bill that will triple the state budget for rice competitiveness to P30 billion over six years, as his government seeks to boost food security amid rising prices.
He also introduced a measure allowing foreign tourists to claim refunds for purchases worth at least P3,000 (about $52) at state-licensed stores, as the Southeast Asian country hopes to boost a tourism sector which was one of the slowest to recover from the crisis. a coronavirus disease 2019 (COVID-19) pandemic.
Republic Act (RA) No. 12078, or the Measure to Amend the Agricultural Tariffication Act, will increase annual funding for the Rice Competitiveness Enhancement Fund (RCEF) from P10 billion to P30 billion and extend its life to 2031.
“This will allow us to do much more for our farmers and ensure they have the resources they need to succeed and make the rice industry even more competitive,” Mr Marcos said at the signing ceremony in Malacañang.
The €30 billion RCEF will be used to develop high-quality inbred rice seeds, distribute cash support to farmers and build solar-powered irrigation systems and composting facilities.
The measure also amends RA 11203 or the rice tariffFIcation Law (RTL) of 2019 that opened up the rice import trade to private entities, which was previously dominated by the National Food Authority (NFA), which imported the grain through government-to-government agreements.
The private traders were instead forced to pay a 35% tariff on rice imports. The government has since reduced the tariffs to 15% and applies to rice from all sources.
The amended law still prohibits the NFA from importing rice.
On the sidelines of the ceremony, Agriculture Secretary Francisco P. Tiu Laurel Jr. told reporters that the impact of the investments on the agricultural sector will be visible in one to two years.
“In the long run, this should reduce the price of rice because if we can produce more through the higher budgets and extend the runtime, it would be more efficient.Ficient, and we will produce more per hectare,” he said in mixed English and Filipino.
“The extended RTL includes soil remediation and an additional annual irrigation budget, as our main issues now are irrigation and mechanization.”
Under the law, the Department of Agriculture (DA) will oversee a database of grain warehouses and storage facilities and monitor the country’s rice reserves.
The DA will also be required to maintain a P5 billion rice buffer fund during food security emergencies.
The NFA will also be allowed to sell rice buffer stocks through Kadiwa ng Pangulo rice centers in areas experiencing rice shortages or extraordinary rice price increases.
Raul Q. Montemayor, national manager of the Federation of Free Farmers, said a government focused solely on lowering rice prices could come at the expense of farmers.
“RCEF will be just another ‘pampalubag-loob (comfort)’ so that farmers will not complain if the government decides to cut rates or flood markets with cheap rice,” he said in a Viber message.
“It was intended for farmers to compensate them for the loss of income due to the lifting of quantitative import restrictions, and to help them reduce their production costs to make them more competitive and profitable.”
According to the Bureau of Customs, rice tax collections last year amounted to about P30 billion.
“It is very good that the president is moving ahead with the tariff policy despite strong opposition because it will benefit consumers,” Roehlano M. Briones, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message.
But he also cited the need for the government to assess how expanding and increasing annual funding for RCEF would impact spending on its national rice program.
“We must increase and strengthen our support to local rice farmers to remove all false narratives from our economic managers about the need for imports and reduction of tariffs to be imposed on our rice farmers under this new law,” said Samahang Industriya ng Agrikultura Executive. Director Jayson H. Cainglet said in a Viber message.
VAT REFUND FOR TOURISTS
Also on Monday, Mr. Marcos signed RA No. 12079 or the Value Added Tax (VAT) Refund Mechanism Law for Non-Resident Tourists, a priority measure aimed at encouraging foreign tourists to spend more in the country .
Mr. Marcos said the measure is expected to increase tourism expenditure by 30%, which could especially benefit micro, small and medium enterprises selling Philippine products.
“These products tell our story, and now, with the VAT refund, they will be able to become more accessible to global consumers, once again elevating our image in the global marketplace,” he said.
Under the new law, goods must be purchased in person by foreign visitors from authorized stores and left the country within 60 days of the date of purchase.
The value of goods purchased per transaction was set at P3,000, but this may be adjusted by the Secretary of Finance taking into account the consumer price index.
“It is high time that the Philippines catches up with countries around the world that have long established a standard VAT refund system. This strategic initiative aims to encourage foreign tourists to spend more in our country and thus stimulate our domestic economy. With increased spending on tourism, we will be able to collect higher revenues, create more jobs, increase incomes and accelerate economic growth,” said Treasury Secretary Ralph G. Recto.
In a statement, the Department of Finance (DoF) said the lost revenue from the law offcaused by higher expenditure on tourism.
“DoF data shows that savings from the refund fully channeled to additional tourism expenditures could boost economic output by P2.8 billion to P4 billion annually,” the report said.
The World Travel and Tourism Council previously projected that the Philippine travel and tourism sector will increase its contribution to gross domestic product to P9.5 trillion annually or 22% of economic output in the next decade.
In his speech, Mr. Marcos tasked the DoF and the Bureau of Internal Revenue to establish “simple, accessible and culturally inclusive” implementing rules and regulations for the VAT refund system.
The new law allows the refund process to be carried out electronically or in cash through operators tapped by the DoF.
Senate President Francis Joseph “Chiz” G. Escudero said these incentives will attract more visitors to the Philippines.
“The tourism sector makes a consistent contribution to our economy, so an increase in arrivals would boost our GDP and generate more jobs for our people,” he said in a separate statement.
Based on data from the Department of Labor, the tourism industry employed 6.21 million Filipinos last year, which was 13% of the workforce.
Meanwhile, the President also signed into law RA No. 12080, or the Basic Mental Health and Well-Being Promotion Act, which will create new positions for school counselors and direct the Budget and Management and Education departments to come up with comprehensive mental health programs. .
“When our students and school staff are mentally healthy, academic performance improves, absenteeism decreases and a culture of compassion and understanding flourishes,” said Mr. Marcos.
Under the new law, care centers led by school counselors will be established in every public primary school to help students deal with stress management and other mental health issues.