An Act Liberalizing the Importation, Exportation and Trading of Rice, Lifting for the Purpose the Quantitative Import Restriction on Rice, and For Other Purposes

Monday, July 23, 2018

Sec. 2. Declaration of Policy

The State shall:

• ensure food security
• make the country’s 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 3. Definitions

• a ‘Agricultural products’ are specific commodities classified under Chapters 1-24 of the Harmonized Commodity Description and Coding System (HS) adopted and used in Section 1611 of RA 10863 (Customs Modernization and Tariff Act or CMTA.
• c ‘ATIGA Rate’ is the tariff rate commitments under the ASEAN Trade m Goods Agreement (ATIGA) applicable to importations originating from Association of Southeast Asian Nations (ASEAN) member States
• d ‘Bound rate’ is the agreed maximum tariffs on products committed by the Philippines to the World Trade Organization (WTO) under the Uruguay Round Final Act, and under the ATIGA, in accordance with its tariff schedule (Annex 2: Tariffs under the ASEAN Trade in Goods Agreement (ATIGA)- PHILIPPINES)
• e ‘Buffer Stock’ is the optimal level of rice inventory that shall be maintained at any given time to be used for emergency situations and to sustain the disaster relief programs of the government during natural or man-made calamities
• f ‘In-Quota Tariff Rate’ is the tariff rates for minimum access volumes committed by the Philippines to the WTO under the Uruguay Round Final Act:
• g ‘Out-Quota Tariff Rate’ refers to the higher rate of customs duty that is levied on the quantities of an imported agricultural product in excess of its minimum access volume (MAV)
• h ‘Minimum Access Volume’ refers to the volume of a specific agricultural product that is allowed to be imported with a lower tariff as committed by the Philippines to the WTO under the Uruguay Round Final Act;
• i ‘Most Favoured Nation (MFN) Rate’ refers to Philippine tariff rates that are applicable to imports from all sources as prescribed in the CMTA;
• j ‘Quantitative Import Restrictions’ refer to non-tariff restrictions used to limit the amount of imported commodities, including, but not limited to discretionary import licensing and import quotas, whether qualified or absolute
• k ‘Rice’ is all products classified under the Harmonized Commodity Description and Coding System (HS) heading 10.06
• l ‘Rice Shortage’ is when the supply in a market falls short of the quantity demanded
• m ‘Tariff’ is a tax levied on a commodity imported from another country. It earns revenues for the government and regarded as instruments to promote local industries by taxing their competitors. The benefit is accorded to the local producers by the maintenance of a domestic price at a level equal to the world price plus the tariff
• n ‘Tariff Equivalent’ refers to the rate of tariff that provides comparable protection under existing quantitative import restrictions, reflected by the average price gap between domestic prices and world prices
• o ‘Tariffication’ refers to the lifting of all existing quantitative restrictions such as import quotas or prohibitions, imposed on agricultural products, and replacing these restrictions with tariffs."

Sec. 12. Repeal

The following laws and all other laws or provisions of law prescribing quantitative import restrictions or granting government agencies the power to impose such restrictions on agricultural products or hindering the liberalization of the importation, exportation and trading of rice are hereby repealed:

• 8. Subparagraphs i, v, vi, vii, xi. xii, xiii, xiv, xv, xvi, xvii, xviii, xix, xxii, xxiii, and xxv of Section 6(a) of Presidential Decree (P.D.) No. 4, as amended."

Sec. 5. Issuance of Sanitary and Phytosanitary Import Clearance for Rice for the Sole Purpose of Ensuring Food Safety

All importers of rice are required to secure a Sanitary and Phytosanitary Import Clearance (SPSIC) from the Bureau of Plant Industry (BPI) prior to importation as long as:

• the clearance shall not provide for import volume and timing restrictions
• failure on the part of the BPI to release the SPSIC without informing the rice importer of any error, deficiency, omission, or additional documentary requirement shall mean automatic approval of the SPSIC applied for within 7 days after submission of the complete requirements.

The imported rice should arrive before the expiration of the SPSIC from the BPI.

The food safety regulatory function of the NFA under Item (i), Section 16 of R. A. No. 10611, otherwise known as the ‘Food Safety Act of 2013’ is hereby transferred to the BPI.

Sec. 6. Tariffication

In lieu of quantitative import restrictions, the maximum bound rates committed under the Uruguay Round Final Act shall be imposed on the agricultural products whose quantitative import restrictions are repealed by this Act.

For the tariff equivalent of the quantitative import restrictions on rice, the bound rate shall be as notified by the Philippines to the WTO as follows:

• a) For the minimum access volume committed by the Philippines to WTO. the in-quota tariff rate indicated in the applicable provisions of the WTO Agreement on Agriculture shall apply
• b) For rice imports originating from ASEAN member states, the import duty rate under the ATIGA shall apply
• c) For rice imports originating from non-ASEAN WTO member states, the out-quota tariff rate is 180% or the tariff equivalent calculated in accordance with Paragraph 10 pf Annex 5, Section b, of the WTO Agreement on Agriculture upon the expiration of the waiver relating to the special treatment for rice of the Philippines, whichever is higher, shall apply.

The calculated tariff equivalent shall be determined by the Tariff Commission and approved by the NEDA Board within 45 days upon the effectivity of this Act.