Act on Rice Trading (Republic Act No. 11203)

, i,u. 1"·98 1 l. i'i-.J. 7735 �epnhlü: of tlp� l3 l1ilippincs filongress af f4e J4ilip-pines .illetro �JfümH11 ,_ .feeuim±eeufl1 C!1ongress Begun and held in Metro Manila, on Monday, the twenty-third day of July, two thousand eighteen, • [ REPUBLIC AcT No. 112 O 3 ] ACT LIBERALIZI N G THE IMPORTATION. hXPORTATION AND TRADING OF RICE, LIFTING FOR THE P.U RPOSE THE QU.A NTTITATTVE TMPORT RESTRICTION ONRICE, AND FOROTHERPURPOSES Be il enaclecl by the Senate and HollSC of Represenl-atives of t.he Phili:ppines in Congress as embled: SECTION 1. Secti.on 2 of Republic Act (R. A.) No. 8178. a. amended. is hereby further amended to read as follows: '-SEC. 2 Declara.lion of Policy. - lt i- the policy of the State to ensure food security and to make the country's agricultnral sector viable. efficient and globally competitive. The State adopts the use of tari.ffs in lieu of non-tariff irnport restriction.s to protect local producers of agricultura! products. X X X.'' 3 SE C . 2 . Se ction 3 of R . A. No . 8 1 7 8 . as amended is " (i) ·Most Favoure d l\ation (MF)J) Rate' refers he reby further amende d to read as follows: to P h ilippine tariff rate s that a re app licable to 1mports from ali sources as prescribed in the CMTA : ''SE C . 3 . Definition of Tenns . - The following definitions apply to the terms used in this Act: "(j) 'Quantitative l m p ort Restrictions' refer to non-tariff restrictions use d to limit the amount of "(a) 'AgTicultural products' shall refer to specific imported commodities, including, but not limited to . commodities classifie d under Chapters 1 - 2 4 of the discretionary imp ort lice nsing and import quotas Harmonized Commodity De scription and Coding whether q ualified or absolute ; 'ir. System (HS) adopted and used in Section 1 6 1 1 of R. A. No. 1 0863, otherwise known as the "Customs "(k) 'Rice' refers to ali products classified under Modernization and Tariff Act" (CMTA) ; the Harmonized Commodity Description and Coding System (HS) heading 1 0 .06; "x X X " (l) 'Rice · shortage' is a situation where the " ( c) 'ATl GA R a t e ' r e fe r s to t a r i ff r a t e ciuantity available or the supply of the commodity f' n m m i tm ,c, n h, 1 1 n rl P r t h P A �l<'. A i\ 'T' ... o rl A i n Qnr.rl c:: m a market falis short of the q uantity dem anded or Agre e m e nt (ATI GA) applicable to importatio ns required at a given tim e ; originating from Association of Southeast Asian Nations (ASEAN) member States ; " ( m ) ' T a r iff r e fe r s to a t a x l e v i e d o n a commodity imported from another country . It earns "(d) 'Bound rate' refers to the agreed maxim um re v e n u e s fo r the govern m e nt a nd re garde d a s tariffs on products committed by the Philippine s to rnstruments to promote local industries b y taxing the World Trade Organization (WTO) under the their competitors. The benefit is accorded to the local Uruguay Round Final Act, and under the ATIGA, producers by the mainte nance of a domestic price at in accordance with its tariff schedule (Annex 2 : a level equal to th e world price plus the tariff; 'Pariffs under the ASEAN Trade in Goods Agreement (ATI GA) - PHILIPPINES); "(n) 'Tariff Equivalent' refers to the rate of tariff that provides comparable protection under existing "(e) 'Buffer Stock' refers to the optimal level of quantitative imp ort re trictions. reflected by the rice inventory that shall be maintained at any given average price gap between domestic prices and world time to be use d for e mergency situations and to prices; and s u s t a i n t h e d i s a s t e r r e li e f p r o gr a m s of the government during natural or man-made calamities: "(o) 'Tariffication' refers to the lifting of all existing quantitative restrictions such as import "(f) 'ln-Quota Tariff Rate' refers to the tariff quotas or prohibitions, i m p o se d on a gricultura! rates for minimum access volumes committed by t.he pro ducts, and r e p l acing the se re strictions with Philippines to the WTO under the Uruguay Round tariffs .'' Final Act: SE C . 3. Section 4 of R. A. No. 8 1 78 . as amended. is "(g) 'Out-Quota Tariff Rate' refers to the higher hereby further amende d to read as follows : rate of custo m s duty that is levied on the quantities of an imp orted agricultural product in exces of its "SE C . 4 . Repea.l . - The following laws and all m inim um access volume (MAV) ; o the r la w s or p r o v i s i o n s of l a w p r e scribin g q u a n tit a t iv e i m p o r t r e s t r i c ti o n s or g r a n t i n g "(h) 'Minimum Access Volume· refers to the government a gencie s the p ower t o i m p o s e s uch volume of a specifi c agricultura! product that is restrictions on agTicultural products or hindering the allo w e d to be i m p orted with a low e r tariff a s liberalization of the imp ortation. exportation and committed b y the Philippines to the WTO under the trading of rice are hereby rep eale d : Uruguay Round Final Act;

- 1 5 ·'x X X "(a) For the minimum access volume committed by the Phílippines to WT0, the in-quota tariff rate ·'(8) Subparagraphs i, v, vi, vii, xi. xii, xiii, xiv. md1cated m the applicable provisions of the WTO xv. xvi, xvii, xviii, xix, xxii, xxiii, and xxv of Section Agreement on Agriculture shall apply; 6(a) of Presidential Decree (P.D.) No. 4. as amended." "(b) For rice imports originating from ASEAN SEC. 4. A new Section 5 is herel:5y inserted after Section member states, the import duty rate under the 4 of R. A. No. 8178, as amended, to read as follows: ATIGA shall apply; and ·'SEC. 5. Issuance of Sanitary and "(e) For rice imports originating from non­ Phytosanitary lmport Clearance for Rice for the Sole ASEAN WT0 member states, the out-quota tariff Purpose of Ensuring Food Safety. - All importers rate is one hundred eighty percent (180%) or the of nce are reqmred to secure a Sanitary and tanff equ1valent calculated in accordance with Phytosanitary Import Clearance (SPSIC) from· the Paragraph 10 ç,f Annex 5, Section b, of the WTO Bureau of Plant Industry (BPI) prior to importation Agreement on Agriculture upon the expiration of the rn accordance with existing laws, rules and wa1ver relatmg to the special treatment for rice of regulations: ProtJided, That the clearance shall not the Philippines. whichever is higher. shall apply. provide for import volume and timing restrictions: Prouided, further, That failure on the part of the ·'The calculated tariff equivalent shall be BPI to release the SPSIC without informing the rice determined by the Tariff Commission and approved importer of any error, deficiency, omission, or by the National Economic Development Authority additional documentary requirement shall mean (NEDA) Board within forty-five (45) days upon the automatic approval of the SPSIC applied for within effectivity of this Act." seven (7) days after submission of the complete requll'ements. SEC. 6. A new Section 7 is hereby inserted after Section 6 of R. A. No. 8178, as amended, to read as follows: "The imported rice should arrive before the expiration of the SPSIC from the BPI. "SEC. 7. Powers of the President. - Consistent with the Philippine national interest and the objective "The food safety regulatory function of the NFA of safeguarding Filipino farmers and consumers. the under Item (i), Section 16 of R. A. No. 1 0611, President is hereby empowered to act with full otherwise known as the 'Food Safety Act of 2013'. delegated authority subject to the provi.sions of the is hereby transferred to the BPI." CMT A. in the following circumstances: SEC. 5. Section 6 of R. A. No. 8178, as amended, 1s ·'(a) The President may increase, reduce, revise. hereby further amended to read as follows: or adjust existing rates of import duty up to the bound rate committed by the Philippines under the ''SEC. 6. Tarifficaúon. - In lieu of quantitative WT0 Agreement on Agriculture and under the import restrictions, the maximum bound rates ATIGA, incl uding any necessary change i n committed under the Uruguay Round Final Act shall classification applicable to the importation of rice: be imposed on the agricultura! products whose Prou1:ded, That the power herein delegated to the quantitative ímport restrictions are repealed by this President shall only be exercised when Congress is Act. x x x. not in session: Prouided, further, That any orderf ISsued by the President adjusting the applied tarif rates shall take effect fifteen (15) days after ''x X X publication; ·'For the tariff equivalent of the quantitative import restrictions on rice, the bound rate shall be as notified by the Philippines to the WT0 as follows:

1 6 ··(b) In the event of any imminent or forecasted accordance with the cstablished rules. regulations and shortage, or such other situation requiring guidelines.'· government intervention. the President is empowered for a limited period and/or a specified volume, to SEC. 10. A new Section 10 is hereby inserted after the allow the importation at a lower applied tariff rate new Section 9 of R. A. No. 8178, as amended, to read as to address the situation. Such order shall take effect follows: immediately and can only be issüed when Congress '-SEC. 10. Special Rice Safeguard. - ln order is not in session; and to protect the Philippine rice industry from sudden,. or extreme price fluctuations. a special safeguard "(e) ln case the calculated out-quota tariff rate duty on rice shall be imposed in accordance with referred to under Section 6(c) of this Act exceeds one R. A. No. 8800, otherwise known as the 'Safeguard hundred percent (100%), the provision of Paragraph Measures Act" and its implementing rules and 1. Section 1608(a) of the CM'J'A shall also not apply. regulations." ·"The power herein delegated to the Presiclent SEC. 11. Scction 7 of R. A. No. 8178. as amended, is may be withdrawn or terminated by Congress through a Joint Resolution." hereby renumbered as Section 11 and is amended to read as follows: SEC. 7. A new Section 7-A is hereby inserted after the "SEC. 11. Mechanism for the lmplemenlation new Section 7 of R. A. No. 8178, as amended. to read as o( Minimum Access Volume (MA V). - An equitable and transparent mechanism for allocating the l\.1A V follows: of a gricultura! products whose quantitative restrictions are herein lifted, shall be developed and ·'SEC. 7-A. Trade Negotiation A.uthority. - In establish ed. having the least government the interest of the Philippine rice industry and intervention, addressing the requirements of each Plúlippine consumers, and upon the recommendation geographical area, and without entailing any cost to of the NEDA and the Department of Ag1·iculture importers/users of these products to the detriment of (])A), the President may enter into trade negotiations local consumers and other end-users. or renegotiations of the Philippine international trade commitments on rice.'' "ln the case of rice, its MAV will revert to its 2012 level at three hundred fifty thousand metric SEC. 8. A new Section 8 is hereby inserted after the new tons (350,000 MT) as indicated in the Philippine Section 7-A of R. A. No. 8178. as atllended. to read as follows: commitment to the WTO. ·'SEC. 8. Maintena.nce o( Rice Buffe,· Stock - X X X." The NFA shall, in accordance with the rules. regulations and procedures to be promulgated. SEC. 12. Section 8 of R. A. No. 8178. as amended, is maintain sufficient rice buffer stock to be sourced hereby renumbered as Section 12 and is amended to read as solely from local farmers." follows: SEC. 9. A new Section 9 is hereby inserted after the new "SEC. 12. Agriculturol Competitiueness Section 8 of R. A. :'.'Jo. 8178. as amended, to read as follows: Enhancement Fund. - To implement the policy enunciated in this Act, there is hereby created the "SEC. 9. Lifting of Qua.nt1:tatiue Expo rt Agricultura} Competitiveness Enhancement Fund, Restrictions on Rice. - Any and all laws. rules, herein referred to as the Fund. The Fund shall regulations. guidelines, and other issuances imposing consist of all duties collected from the importation quantitative export restrictions on rice are hereby of agricultural products. except rice. under the l\.1AV repealed. The exportation of rice shall be allowed in mechanism, including unused balances and collections from repayments from loan beneficiaries including interests. if any. The Fund shall be automatically credited to Special Account 183 in the

9 General Fund of the National Treasury : Pro uided, That fund releases shall not be subj ect to any ceiling "Any program undertake n in accordance w ith this Act shall only be deemed com p lementary and 1- by the Departm e nt of B udget and M anagement upp let:J?-entary to and shall not be a replacement of (DBM). any e x1stmg p rograms for rice and rice farmer already implemented by the DA and other agencies "x X X . concerned. S E C . 1 3 . A new Section 1 3 i s hereby inserted after the "Subj ect to the usual accounting and auditing renumbered Section 12 of R. A. 1 o. 8 1 78, as amended. to read rule s a n d re g u l ation , the Rice F u n d shall be l'l as follows : allocated and di bursed to rice producing area . as follows: "SEC. 1 3 . Rice Co mpetitiveness Enhancem ent Fun d . T h e r e is hereby cre a t e d a Rice ·'(a) Rice Farm Machinerie s and Equip ment - Competitiveness Enhancement Fund, herein referred fifty percent (50%) of the Rice Fund halJ be released to as the 'Rice Fund'. The Rice Fund shall consist to and implemented by the Philippine Center for of an annual ap p ropriation of Te n billion p e sos P o s tharve s t D e v e l op m e n t a n d M e c h a n i za t i o n ( P l0 , 000 , 0 00 , 000 . 00 ) for the next six ( 6 ) v e a r s (PH il_ME;ch) as �ran t i n k i n d t o e l i gi h l e fa rmen, foliowing t h e approval o f this Act and shàl l be assoc1at10ns, reg1stered rice cooperatives and local autom atically credited to a Special Account i.n the governme nt units (LGUs), in th e form of rice fal'm General. Fund of the National Treasury which shall e q uip m e n t , s u c h as till e r s , tractors . s e e d e r s , be in p lace within nine ty (90)' days up o n the threshers, rice planters, harvesters, irrigation pumps, effectivity of this Act. small solar i.rrigation, reapers, driers, miUers, and t h e l i � e , . fo r p u rp o se s of i m p r o v i n g fa r m ·'At the end of the sixth (6th) year, a mandatory mecharuzat10n: Pronded, That the PHilMech shall review shall be conducte d by the C o ngre ssio n a l w he neve r fe asible, p rocure from accre dited locai Oversight Committee o n Agricultuxal and Fisheries manufacturers to assist in the promotion of locally Modernization (COCAFM) to determine whether the man ufactured farm machineries and equipment: Rice Fund and it use as provided for under this Act shall be continued, amend ed, or term inated . The " (b) Rice Seed Development. Propagation and COCAFM shall utilize the increase or decrease in Promotion - Thirty percent (30%) of the Rice Fund far m e rs i n co m e s a s a p r i m ary b e nchm ark i n s h all be re l e a se d to a n d i m p le m e nte d by the determining the effectiveness ot'. the interventions Philippine Rice Research I nstitute (PhilRice) and under the program and its possible extension. ·hal l be used for the development, p ropagation and promotion of inbred rice seeds to rice farmers and '' T h e S e c r e t a ry of A g r iculture sh all b e the organization of rice farmers into seed grow ers accountable and responsible fo r the Rice Fund in associations and/or cooperatives engaged in eed c o o r d i n a tio n w i th other gove r n m e n t a ge n ci e s production and trade : concerned. "(e) Expanded Rice Credit Assistance - Te n ''The amount aJ.located sha ll be released directly p e rce nt ( 1 0%) of t h e Rice Fund shall be m a de to the implementing agencies a provided for in this available in the form of credit facility with mini mal Act based on the obj ectives and plans of the rice i nt e r e s t r a t e-s a n d w i t h m i n i m um c o l l a t e r a l industry roadmap : Pro vided, That the unutilized require ments to rice fa1·mers and cooperatives, to be p o r ti o n of the Rice F u n d a l l o c a t e d to t h e m a n a g e d e qu a l l y by t h e L a n d B a n k of t h e im p lementing age n cie s s h a l l n o t reve r t t o the Philippines (LBP) and the Development Bank o f the General Fund but shall continue to be used for the Phil ippine s (DBP) : and purpose for which it was set aside . Fund release charged against the Rice Fund shall not be subject "(d) Rice Extension Servi.ce - Ten percent (10%) to any ceiling by the Dep artment of Budget and of the Rice Fund shall be made available for the Management (DBM).

- r 10 IJ extension services provided by PHilMech. PhilRice. awarded to fa rmer-beneficiaries under the Agricultura} Training Institute (ATI) and Technical Comprehensive Agrarian Reforro Program (CARP) Education and Skills Development Authority and other similar programs of the government: (TESDA) for teaching skills 011 rice crop production, modern rice farming techniques, seed production, "(e) Expanded Crop Insurance Program on Rice farm mechanization, and knowledge/technology - A portion of the excess tariff revenues shall be transfer through farm schools natíonwide as follows: released to the Philippine Crop Insurance Corporation seventy percent (70%) to TESDA, ten percent (10%) (PCIC) and shall be used for the provision of crop each to ATI, PhilRice and PHilMech. insurance to qualified rice farmer-beneficiaries under 111 its existing agricultura] insurance programs; and "Prouided, That the percentage allocation will be reviewed on the third year of the effectivity of this "(d) Crop Diversification Program - A portion Act for possible revisions should intervention of the excess tariff revenues shall be released to the priorities change. DA and shall b� used for productivity-enhancement programs for rice farmers seeking to diversify '-Prouided, further, That preferential attention production towards other crops. should be given to rice farmers, cooperatives and associations adversely affected by the tariffication of "The Congressionai Oversight Comm1ttee on the quantitative import restriction on rice in Agricultura! and Fisheries Modernization (COCAFM) accordance with the thrust and priorities of R. A. shall conduct a periodic review of the use of the Rice No. 8435, as amended, otherwise known as the Fund." 'Agriculture and Fisheries Modernization Act' and the Philippine Development Plan (PDP). The increase or SEC. 14. A new Section 14 is hereby inserted after the decrease of farmers' incomes shall be the primary new Section 13 of R. A. �º- 8178. as amended, to read as benchmark in granting these interventions. follows: r "Prouided, fnrthermore, That if the annual "SEC. 14. Beneficiaries of the Rice Fund. - The tariff revenues from rice importation exceeds Ten beneficiaries of the Rice Fund shalJ be those farmers billion pesos (Plü,000,000,000.00) in any given year and farmworkers and their dependents listed in the within the six (6) year period following the effectivity Registry System for Basic Sectors in Agriculture of this Act, the excess tariff revenues shall be (RSBSA), and rice cooperatives and associations earmarked _by Congress and inçJuded in the General accredited by the DA. Within one hundred eighty Appropnatwns Act (GAA) of the followmg year: (180) days from the effectivity of this Act, the DA, in consultation with farmers' cooperatives and "(a) Rice Farmer Financial Assistance - A organizations and LGUs, shall validate and update portion of the excess rice tariff revenues shall be the masterlist of eligible beneficiaries to ensure that released to the DA and shall be used for providing those listed are legitimate farmers, farmworkers and direct financial assistance to rice farmers who are rice cooperatives and associations. farming two (2) hectares and below regardless of whether they continue farming rice or not as ·111 order to focus on the targeted rice farmer compensation for the projected reduction or loss of beneficiaries, cooperatives and associations for the farm income arising from the tariffication of the Rice Fund, the list of rice producing provinces and quantitative import restrictions on rice; LGUs, as provided for by PhilRice as of 2015-2018. shail be the basis and shall be added to the roadmap "(b) Titling of Agricultura} Rice Lands - A as an appendix." portion of the excess rice tariff revenues shall be released to the Department of Agrarian Reform (DAR), Department of Environment and Natural Resources (DENR) and Land Registration Authonty (LRA), and shall be used for the subdivision and titling of agricultura! rice lands or parts thereof

,. 12 13 SEC'. 15. A new Section 15 is hereby inserted after the rice sector programs as funded by the GAA and the new Section 14 of R. A. No. 8178. as amended. to read as Rice Pund created under this Act."· follows: SEC. lG. A new Section 16 is hE:reby inserted after the .. SEC. 15. Rice Industry Roadm.ap. - -Cpon the new Section 15 of R. A. No. 8178. as amended. to read as effectivity of this Act, the DA. ,together with the follows: NEDA. Department of Finance (DOF), DBM, DAR, National Irrigation Administration (N1A), TESDA. ''SEC. 1.6. National Single Window Program.,- PCIC. National Anti-Poverty Commission (NAPC) To ensure the accurate collection of tariff as Farmer Sectoral Council Representative and other provided in Section 6 of this Act, the National Single government agencies concerned, including rice farmer Window (NS\V) program of the Bureau of Customs representatives, shall be given a maximum of one (BOC) shall be implemented within one hundred eighty (180) days to forrnulate and adopt the hundred eighty (180) days from the effectivity of this rice roadmap to restructure the government's Act in accordance with Executive Ordel' No. -182.'. delivery of support services for the agricultura! rice sector. SEC. 17. lmplementing Rllles and Reglllalions. - Within forty-five (45) days fr um effectivity oÍ this Act, the DA. NEDA "The following principles shall govern the and DBM shalL in coordination with DAR, DEJ\"R, NIA. LRA, development and implementation of the roadmap for the rice industry: PCIC. PHilMech, PhilRice, TESDA, LBP, DBP, ATI, and other government agencies concerned and after consultation '·(a) Raise sustainable investments in the rice with directly affected stakeholders, promulgate the rules and industry particularly on rice support infrastructure regulations to effectively implement the provisions of this Act. and post-harvest facilities; SEC. 18. Sepora.bility Cla.use. - If any portion of this Act '·(b) Improve the productivity, efficiency and is declared invalid or unconstitutional. the portions or ptofitability of small rice farmers and landless provisions which are not affected shall continue to be in full farmworkers: force and effect. ·'(e) Strengthen research a� d developme_nt programs that will enhance the resihency of the nce SEC. 19. Repealing Clause. - All laws. decrees, executive industry: issuances, rules and regu.lations inconsistent with thjs Act are hereby repealed or modified accordingly . .. (d) Preserve and enhance the rice production capabilities of future generations: SEC. 20. Effectiuity. - This Act shall take effect fifteen (15) days after its publication in the O/fiáal Gazette or in a ··ce) Provide accessible, targeted and te�lmology­ newspaper of general circulation.

k'� oriented support services that cover the entll'e value chain; A.pproved. "(f) Set up responsible, participatory and effective gove1·nance mechanisms: and .. (g) Address impact of income loss caused by � ! rice tariffication. GLORIA MACAPAGAL-ARROYO CENTEl/fc. sorro Ili Speaker of the House Preside;(:f" //1,: Sena/e ''The rice industry roadmap shall be of Representatires implernented through a complementation of the DA's '-/ This Act which is a consolidation of Senate Bill No. 1998 and House Bill No. 7785 was passed by the Senate and the House of RepresentatJVes on November 28. 2018. , MYRA MARIE D. VlLLARlCA Acting Secretary General Secrerwy of the Senate J-fouse o/' Represenratives Approved: FE B 1 4 2019 o REPUBLIC OF THE PHILIPPINES PRRD 2016 - 009364