CHIZ SAYS TARIFF OR NO TARIFF, RICE IS ALREADY EXPENSIVE

Removing the tariff on imported rice will not make it cheap, " just expensive from super expensive, " Sen. Francis Escudero said today in reaction to government plans to temporarily waive the 50 percent duty on foreign rice.

"Lest we all get excited about it, the fact is, tariff removal isn't the magic cure to high rice prices," Escudero said.

Rice brought in at $735 per metric ton, which was the contract price of one shipment that will come Vietnam and Pakistan, already translates into P30.75 per kilo, duty-free, but still out of reach for most Filipinos, Escudero said

"Is 31 pesos per kilo affordable? To most Filipinos it is not. If you slap the 50 percent tariff, the cost will be about 46 pesos per kilo, which can be the Filipino version of the Apocalypse, " Escudero.

"So whether duty-free at P31 per kilo, or P46 per kilo to include the 50 -percent duty, rice will be expensive. There can only be levels of pain in between this range," he said.

"Even if private traders will do the duty-free importation, the floor price will be around P32 per kilo, a level that would allow them to recover their capital, and make a little money on the side, " he said.

Escudero said the NFA should be allowed to import rice duty free " if only to stop this ridiculous accounting practice of booking government's own tariff payments as revenues."

"Government's own revenue report is padded by about P25 billion a year because what the Department of Finance gets from the Department of Budget and Management for NFA duties gets counted as Customs collection, which is a self-deluding exercise because it comes from the government's own pocket itself, " Escudero said.

The rice crisis can give the government a revenue windfall that can artificially shore up its tax collections, Escudero said.

Escudero also expressed doubts if private groups can source cheap and abundant rice abroad, "given the well publicized crunch in the global rice supply."

" China is curbing cereal exports. Vietnam has cut rice exports by 22 percent to prevent domestic inflation. India has increased the price of its rice export by 50 percent. And the price for cargoes of Thai medium-grade 15 percent broken rice has doubled to $735 a ton this month, from $360 at the end of 2007, " he said

"The global hunt for rice can be likened to a desert safari. You may have lots of money to buy a bottle of water, that is if you can find one in the middle of the desert, " he said.