Shortfall in rice tariff collection seen to impact fiscal balance

A foreseen shortfall in the rice tariff collections this year may further strain the government's already limited fiscal space, potentially increasing its reliance on borrowings next year to sustain rice programs, experts warned.

- JASPER EMMANUEL ARCALAS

Former agriculture undersecretary Fermin Adriano said that if rice tariffs remain at a record low of 15 percent this year, then the government faces a "deficit problem" in 2026 since collections this year might fall short of the minimum P30 billion for the rice competitiveness enhancement fund (RCEF).

Rice tariffs collected each year are earmarked by the government to bankroll the RCEF, aimed at improving the local rice industry's competitiveness.

However, in the event that rice tariffs collected fall below P30 billion, the deficiency would be sourced from the regular budget of the Department of Agriculture (DA), under the amended Rice Tariffication Law.

This, experts noted, could pose a problem to the overall budget of the DA since it would mean that some programs of the department might face an allocation cut to fill in the deficiency in the guaranteed RCEF.

"(The National Rice Program) will most likely be adversely affected because of substantial overlap with RCEF assistance," Adriano noted.

He pointed out that the budget from slow disbursing programs of the DA might also be taken away to fill in the possible gap in RCEF allocation next year.