Philippines steps up fight against inflation with food tariff cuts

MANILA, June 7 (Reuters) – The Philippines said on Tuesday it has extended until the end of 2022 an executive order that lowers the tariff rate for rice imported from outside Southeast Asia to 35 percent, against 40% to 50%.

In the race to bring inflation under control, the government also cut tariffs on corn and pork and announced the temporary removal of a 7% tariff on imports of coal, a key fuel in production. of electricity.

The amended tariff schedule, originally released last year and extended by President Rodrigo Duterte last month, was made public on Tuesday after data showed inflation in May was at its highest since November 2018 and above. of the target range of 2% to 4% this year.

The Philippines, expected to be the world’s second largest buyer of rice this year after China, is expected to import 2.8 million tonnes for the 2022/23 marketing year to cover a domestic shortfall, according to the US Department of Agriculture.

The reduction brings the tariff on rice in line with the current 35% rate for imports from the country’s Southeast Asian neighbors.

The Philippines remains heavily dependent on Vietnam for its import needs and also purchases some volumes from Thailand.

It rarely imports from India, the world’s largest exporter, but Manila has recently floated the idea of ​​diversifying its sources for a cheaper supply, with Indian rice as an alternative.

Manila’s decision to keep rice tariffs low comes at a time when Thailand and Vietnam are considering raising prices, although a senior Thai industry official has raised questions about the viability of the plan.

Tariff rates on maize have been reduced to 5% to 15%, in effect until the end of 2022 and returning to 35% to 50% next year, while tariffs on corn-based products pork will remain at a lower level of 15% to 25% until the end of the year and will return to 30%-40% next year.

Reporting by Enrico Dela Cruz and Karen Lema; Editing by Martin Petty and Kanupriya Kapoor

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