Policy, tariffs over quotas
- Republic Act No. 11203 amends Section 2 of Republic Act No. 8178 to declare the policy of the State to ensure food security and make the agricultural sector viable, efficient, and globally competitive.
- The State adopts the use of tariffs in lieu of non-tariff import restrictions to protect local producers of agricultural products (Section 2 as amended).
Core definitions for rice trade
- Republic Act No. 11203 amends Section 3 of Republic Act No. 8178 by setting specific definitions used in the Act.
- “Agricultural products” refer to specific commodities classified under Chapters 1-24 of the Harmonized Commodity Description and Coding System (HS) adopted and used in Section 1611 of Republic Act No. 10863 (CMTA) (Section 3(a)).
- “Rice” refers to all products classified under the HS heading 10.06 (Section 3(k)).
- “Quantitative Import Restrictions” refer to non-tariff restrictions used to limit the amount of imported commodities, including discretionary import licensing and import quotas, whether qualified or absolute (Section 3(j)).
- “Buffer Stock” is the optimal level of rice inventory maintained for emergencies and to sustain government disaster relief programs during natural or man-made calamities (Section 3(e)).
- “Tariffication” is the lifting of all existing quantitative restrictions such as import quotas or prohibitions on agricultural products and replacing them with tariffs (Section 3(o)).
Repeal of quantitative import restrictions
- Republic Act No. 11203 amends Section 4 of Republic Act No. 8178 to repeal laws and provisions prescribing quantitative import restrictions or granting agencies power to impose such restrictions on agricultural products or hindering liberalization of rice importation, exportation, and trading (Section 4 as amended).
- The repeal includes specified portions of Presidential Decree (P.D.) No. 4, as amended, by repealing Subparagraphs i, v, vi, vii, xi, xii, xiii, xiv, xv, xvi, xvii, xviii, xix.. xxii, xxiii, and xxv of Section 6(a) (Section 4(8) as amended).
SPS clearance for food safety only
- Republic Act No. 11203 inserts Section 5 into Republic Act No. 8178 requiring all rice importers to secure a Sanitary and Phytosanitary Import Clearance (SPSIC) from the Bureau of Plant Industry (BPI) prior to importation (Section 5).
- The SPSIC is obtained in accordance with existing laws, rules and regulations (Section 5).
- The SPSIC shall not provide for import volume and timing restrictions (Section 5).
- If the BPI fails to release the SPSIC without informing the importer of any error, deficiency, omission, or additional documentary requirement, the SPSIC is deemed automatically approved when applied for within seven (7) days after submission of complete requirements (Section 5).
- Imported rice must arrive before the expiration of the SPSIC from the BPI (Section 5).
- The food safety regulatory function of the NFA under Item (i), Section 16 of Republic Act No. 10611 (Food Safety Act of 2013) is transferred to the BPI (Section 5).
Tariffication and tariff rates system
- Republic Act No. 11203 amends Section 6 of Republic Act No. 8178 by providing that tariffication replaces quantitative import restrictions with maximum bound rates committed under the Uruguay Round Final Act (Section 6).
- For the tariff equivalent of repealed quantitative restrictions on rice, the bound rate applies as follows (Section 6(a)-(c)):
- For the minimum access volume (MAV), the in-quota tariff rate indicated in the applicable provisions of the WTO Agreement on Agriculture applies (Section 6(a)).
- For rice imports originating from ASEAN member states, the import duty rate under the ATIGA applies (Section 6(b)).
- For rice imports originating from non-ASEAN WTO member states, the out-quota tariff rate is one hundred eighty percent (180%) or the tariff equivalent calculated under Paragraph 10 of Annex 5, Section b of the WTO Agreement on Agriculture upon expiration of the waiver relating to the special treatment for rice of the Philippines, whichever is higher (Section 6(c)).
- The Tariff Commission determines the calculated tariff equivalent and the NEDA Board approves it within forty-five (45) days upon effectivity of the Act (Section 6).
Presidential tariff powers with limits
- Republic Act No. 11203 inserts Section 7 empowering the President with full delegated authority subject to the CMTA and in circumstances consistent with national interest and safeguarding Filipino farmers and consumers (Section 7).
- The President may increase, reduce, revise, or adjust existing rates of import duty up to the bound rate committed under the WTO Agreement on Agriculture and ATIGA, including necessary classification changes for rice when Congress is not in session, and the adjustment order takes effect fifteen (15) days after publication (Section 7(a)).
- The President may, for a limited period and/or specified volume, allow importation at a lower applied tariff rate to address any imminent or forecasted shortage or other situation requiring government intervention, and such order takes effect immediately and may be issued only when Congress is not in session (Section 7(b)).
- If the calculated out-quota tariff rate referred to in Section 6(c) exceeds one hundred percent (100%), Paragraph 1, Section 1608(a) of the CMTA does not apply (Section 7(c)).
- The delegated presidential power may be withdrawn or terminated by Congress through a Joint Resolution (Section 7).
Trade negotiation authority
- Republic Act No. 11203 inserts Section 7-A allowing the President to enter trade negotiations or renegotiations of Philippine international trade commitments on rice.
- The authority is exercised in the interest of the Philippine rice industry and Philippine consumers (Section 7-A).
- The President acts upon recommendation of the NEDA and the Department of Agriculture (DA) (Section 7-A).
Rice buffer stock obligation
- Republic Act No. 11203 inserts Section 8 requiring the NFA to maintain sufficient rice buffer stock.
- The buffer stock must be maintained in accordance with rules, regulations, and procedures to be promulgated (Section 8).
- The buffer stock must be sourced solely from local farmers (Section 8).
Lifting quantitative export restrictions
- Republic Act No. 11203 inserts Section 9 repealing any and all laws, rules, regulations, guidelines, and other issuances imposing quantitative export restrictions on rice (Section 9).
- Rice exportation is allowed in accordance with established rules, regulations, and guidelines (Section 9).
Special rice safeguard duty
- Republic Act No. 11203 inserts Section 10 imposing a special safeguard duty on rice to protect the rice industry from sudden or extreme price fluctuations.
- The safeguard duty is imposed in accordance with Republic Act No. 8800 (Safeguard Measures Act) and its implementing rules and regulations (Section 10).
MAV allocation mechanism and rice MAV level
- Republic Act No. 11203 amends Section 11 by requiring an equitable and transparent mechanism for allocating the MAV of agricultural products whose quantitative restrictions are lifted.
- The MAV mechanism must have the least government intervention, address requirements of each geographical area, and not entail any cost to importers/users that would be detrimental to local consumers and other end-users (Section 11).
- For rice, the MAV reverts to its 2012 level of three hundred fifty thousand metric tons (350,000 MT) as indicated in the Philippine commitment to the WTO (Section 11).
Agricultural fund and rice fund creation
- Republic Act No. 11203 amends Section 12 by creating the Agricultural Competitiveness Enhancement Fund (the Fund).
- The Fund consists of all duties collected from importation of agricultural products, except rice, under the MAV mechanism, including unused balances and collections from repayments from loan beneficiaries including interests, if any (Section 12).
- The Fund is automatically credited to Special Account 183 in the General Fund of the National Treasury (Section 12).
- Fund releases are not subject to any ceiling by the Department of Budget and Management (DBM) (Section 12).
- Republic Act No. 11203 inserts Section 13 creating the Rice Competitiveness Enhancement Fund (Rice Fund).
- The Rice Fund consists of an annual appropriation of Ten billion pesos (P10,000,000,000.00) for the next six (6) years following approval of the Act, and is automatically credited to a special account in the General Fund that is in place within ninety (90) days upon effectivity (Section 13).
- At the end of the sixth (6th) year, a mandatory review is conducted by the Congressional Oversight Committee on Agricultural and Fisheries Modernization (COCAFM) to determine whether the Rice Fund and its use shall be continued, amended, or terminated.
- The COCAFM uses the increase or decrease in farmers’ incomes as a primary benchmark (Section 13).
- The Secretary of Agriculture is accountable and responsible for the Rice Fund in coordination with other agencies (Section 13).
- Amounts allocated are released directly to implementing agencies based on objectives and plans of the rice industry roadmap, unutilized allocations do not revert to the General Fund, and releases are not subject to any ceiling by DBM (Section 13).
- Programs under the Act are complementary and supplementary to, and not a replacement of, existing rice and rice-farmer programs implemented by DA and other agencies (Section 13).
Rice Fund spending allocations
- Republic Act No. 11203 requires that, subject to usual accounting and auditing rules, the Rice Fund be allocated and disbursed to rice producing areas (Section 13).
- Fifty percent (50%) of the Rice Fund goes to the Philippine Center for Postharvest Development and Mechanization (PHilMech) as grant in kind to eligible farmers associations, registered rice cooperatives, and LGUs in the form of specified farm equipment for improving farm mechanization (Section 13(a)).
- PHilMech must, whenever feasible, procure from accredited l