Philippines decides not to increase rice import tax, good opportunity for Vietnamese rice

This is good news for Vietnamese rice, which is popular in the Philippines.

Workers load rice onto export ships at My Thoi port, Long Xuyen city, An Giang

According to an announcement on December 18 by the Office of the President of the Philippines, the 35% rice import tariff is expected to expire at the end of 2022.

However, with the Philippines facing its highest inflation in 14 years, President Marcos decided to extend the tax until December 31, 2023.

Import tariffs on corn and pork products will remain at 5-15% and 15-25%, respectively. Import tariffs on coal, a key fuel for power generation, will remain at zero after the end of next year but will be reviewed regularly.

The Philippines' maintenance of a 35% rice import tax is expected to benefit Vietnamese rice businesses. Previously, the Philippines' rice import tax was 40% for rice imported under quota and 50% for rice imported outside the quota.

Vietnam is currently the largest rice supplier to the Philippines. The country imported 2.47 million tons of Vietnamese rice worth a total of $1.14 billion between January and September 2022.

According to the Vietnam Food Association, rice importers in the Philippines are still interested in Vietnamese rice even though Pakistan is offering lower prices.

Explaining this, the Philippine newspaper Philstar said that the supply of Vietnamese rice is stable. The rice varieties also suit the tastes of the Filipino people but still maintain a relatively low price.

Vietnam also has the advantage of geographical distance, which makes it better at delivering goods to the Philippines than its competitors.

While the price of Vietnamese rice remains stable, the price of Thai rice continues to increase and has no end in sight. Currently, the price of 5% broken white rice from Thailand is at 455 USD/ton - the highest in the world; 25% broken rice is at 439 USD/ton, up 5 USD/ton.

Philippine Economic Planning Secretary Arsenio Balisacan explained the extension of the low rice import tariff to "increase domestic food supply, diversify staple food sources and ease inflationary pressures."

Inflation in the Philippines hit 8% in November 2022, far exceeding the central bank's (BSP) target of 2 to 4%. The BSP has adjusted interest rates seven times and warned of further tightening in 2023 to bring inflation back to its desired level.

According to Tuoi Tre