A rice tariff hike could affect the country’s headline inflation in the coming month.

The Department of Agriculture (DA) Secretary William Dar announced on Friday that the government won’t be pushing through with the proposed imposition of rice safeguard measures.

Dar explained that a rice tariff hike could affect the country’s headline inflation in the coming months.

His announcement follows a statement the DA had issued on 10 October saying that the initial investigation the department launched last month that could lead to an additional rice tariff rate has been “terminated.”

“I presented the plan to potentially look into tapping the general safeguard duty to the Cabinet but they decided the move may have an inflationary effect,” Secretary Dar told reporters at the sidelines of the Philippines-India trade consultation on Friday.

Instead, the Cabinet agreed to release one-time cash assistance worth P3 billion to about 600,000 farmers affected by the influx of cheaper imported rice under the Rice Tariffication Law (RTL); each receiving P5,000.

“We are already drafting the guidelines regarding this cash assistance and we are hoping to give it before Christmas so our farmers can have better Christmas,” he said.

Dar explained that the budget for the cash assistance will be taken from the excess tariff being collected under the rice law regime.

Since the law took effect in March, Dar disclosed that the government has already collected P11 billion.

Earlier, the Bureau of Customs confirmed that revenues from the RTL could reach up to P15 billion, surpassing the P10-billion target for the Rice Competitiveness Enhancement Fund (RCEF) allocation.

Meanwhile, Dar also clarified that the new cash assistance agreed by the Cabinet members is different from the P1.5 billion Expanded Survival and Recovery Assistance Program for Rice Farmers (SURE Aid) released last August.

Meanwhile, Raul Montemayos, national manager of organized group Federation of Free Farmers (FFF), said the DA’s move to “terminate” its initiative to study the need to levy higher safeguard duties on rice imports will “pose irreparable harm to farmers.”

Under the WTO rules and Republic Act 8880 or the Safeguard Measures Act, general safeguard duties may be temporarily imposed on imports of rice, on top of regular tariffs, if there is an evident surge in rice imports that threatens the livelihood of rice farmers.

Based on the latest price monitoring of the Philippine Statistics Authority, the current average farm-gate price of dry palay is 29.3 percent lower than the P22.36 per kilogram recorded a year ago.

The figure is the lowest since December 2011 when the palay price was pegged at P15.83 per kilo.