US chamber pushes for repeal of agri foreign investment cap
THE American Chamber of Commerce of the Philippines (AmCham) has called on the government to remove foreign investment restrictions in the rice and corn industry if it wants to boost farm productivity.
AmCham issued the statement after President Ferdinand R. Marcos, Jr. extended tariff reductions on pork, rice, corn, and coal until the end of December.
“The lower tariff rates across these commodities will help keep these products affordable for the consuming public, which needs a reprieve under this high inflation environment,” AmCham Executive Director Ebb Hinchliffe said in a Viber message.
Mr. Hinchliffe said the extension of the low-tariff regime is “only a short-term solution,” calling for a “real effort” to improve farm productivity “in order to break the Philippines’ over-reliance on imports long term.”
“One place to start here is to remove foreign investment barriers in the rice and corn sectors by finally repealing Presidential Decree (PD) No. 194 or the Rice and Corn Law,” he said.
Issued in 1973, PD No. 194 itself eased the total restriction on foreign investment imposed by the Rice and Corn Nationalization Law of 1960.
PD No. 194 authorized the then-National Grains Authority (NGA) to admit foreign investment in case of “urgent need” if the entry of the foreign investor is not likely to create a monopoly. The NGA was also tasked with overseeing the transfer of at least 60% ownership to Filipinos over a period it deems suitable.
In 1998, the NGA’s successor agency, the National Food Authority, set the period of divestment by foreign companies at 30 years, counting from the start of actual operations.
In May, President Ferdinand R. Marcos, Jr.’s sister, Senator Maria Imelda Josefa Remedios R. Marcos, filed a bill amending PD No. 147.
Mr. Hinchliffe said the decree still “requires mandatory divestment of foreign companies participating in the rice and corn sectors, (including activities like) purchasing, storing, transporting and processing of rice and corn.”
“In this regard, we also push for a policy that will allow the tariff revenues for these imported products to be ploughed back into the domestic sectors that need to compete with these imports, akin to the Rice Competitiveness Enhancement Fund created under the Rice Tariffication Law,” Mr. Hinchliffe said.
In the third quarter of 2022, production of palay, or unmilled rice, was 3.79 million metric tons (MT), up from the 3.75 million MT a year earlier, according to the Philippine Statistics Authority.
Corn production was 2.35 million MT during the period, up 2.5% from a year earlier, it added.
In a Dec. 23 report, the US Department of Agriculture’s Foreign Agricultural Service forecast Philippine rice imports this year at 3.8 million MT, while its corn imports could hit 1 million MT “because of the extension of lower tariffs through 2023 and competitive price quotes for orders going forward, especially from ASEAN member states.” — Kyle Aristophere T. Atienza