A welcome approach in Congress
Last Feb. 18, we participated in a House of Representatives hearing of the special committee on globalization and World Trade Organization. Discussed was House Bill No. 4884, which amends Republic Act No. 8800, also known as the Safeguards Measure Act. Its objective is “to make the Philippine economy resilient to the effects of globalization and new technologies.”
Committee chair Rep. Kristine Alexie Tutor introduced this important bill. But since she was not available for the hearing, committee cochair Rep. Ryan Recto presided. He used a new approach. Instead of the usual way of just getting different and sometimes conflicting inputs from the hearing’s participants, Recto encouraged them to meet after the hearing and come to a common agreement on controversial issues. These would then be presented to the committee.
In addition, Recto encouraged these participants to review past events and derive lessons from them to report to the committee.
Rice safeguards
Because of our very difficult rice situation today, rice safeguards were of particular interest. Can an improved safeguards law prevent the recent sad experiences of rice farmers? They did not get these safeguards when the rice tariff was lowered to 15 percent on June 20, 2024.
As a result, rice imports came in at very low prices with a 33-percent increase in volume, causing a dangerous oversupply. Rice farmers suffered tremendously.
At a production cost of P14 per kilo of palay, many farm-gate prices decreased to P11 a kilo. Huge losses occurred, as has never been seen before.
Rice safeguards should have been given to these farmers then, but they were not. This was partly because some safeguard details were missing. After a delay, the Department of Agriculture (DA) imposed a rice import ban from Sept. 1 to Dec. 31 last year.
3 conditions
Let us now identify conditions under which safeguards can be given under the current RA 8800 safeguards law. Sec. 6 identifies three for its implementation, which translates to higher protective tariffs for a given period: “(1) an import increase of like or directly competitive products; (2) the existence of serious injury or threat thereof to the domestic industry; and (3) the causal link between the increased imports of this product under consideration and the serious industry or threat thereof.”
After the reduced 15-percent rice tariff was imposed, the rice industry’s serious injury soon became evident.
Imports increased from 3.6 million tons in 2023 to 4.8 million tons in 2024. But when Raul Montemayor of the Federation of Free Farmers filed a petition for safeguards, he was told that one safeguard condition was not met: palay is not a product like rice. They have two different tariff headings. Therefore, it should be the rice sector, not the palay sector, that is qualified to file the petition.
At the hearing, Montemayor said: “It is true that rice is not like palay. But rice comes from palay. The rice sector is not suffering because they can always import rice. It is the palay farmers who are suffering. We should not be penalized because of too strict an interpretation of the letter of the current safeguard law.” After five months, Montemayor’s safeguard petition has not received a favorable response.
He asked the DA to take on this case “motu proprio.” This means there will be no more need for a private sector petitioner to ask for it.
Montemayor argues: “The Department of Trade and Industry (DTI) successfully did it twice for cement in 2019 and 2025. If DTI helped a few well-off cement manufacturers, DA should similarly do it for more than 2.5 million rice farmers.”
To be fair, the DA used strong political will by temporarily banning rice importation. But how long will this ban last and what low tariffs will be imposed after the ban is lifted? On the other hand, safeguards provide both a definite timetable and specific tariffs during this period.
Innovation
This was the point at which Rep. Recto came in. He suggested that DA, DTI and the Tariff Commission meet with Montemayor and the Alyansa Agrikultura representative after the hearing to find a win-win solution for possible inclusion in the bill.
Recto went further. He proposed that these three government agencies meet with the two farmer organizations to come up with a consensus on what other bill improvements can be made.
Examples are having a special trade representative reporting to the President (as is done in other countries), instead of the bill’s proposed committee. He or she will oversee full-time safeguards and other critical trade issues in today’s challenging global trade environment.
Another example is to significantly shorten the five-year required import surge period before safeguards can be considered.
Recto’s approach to having hearing participants meet to jointly decide on bill recommendations after the hearing can significantly improve a proposed bill’s provisions. This is a welcome development that other bill sponsors should consider for their own respective hearings.
