Caesar B. Cororaton and Krista Danielle S. Yu
Year: 2019 January, Volume 28 No. 2
Philippine domestic prices of rice are significantly higher than world prices for similar rice quality. The WTO-approved Philippine rice waiver, which allows the government to continue its quantitative restrictions on rice imports, sustains the price gap in rice and prolongs the heavy burden on poor consumers who spend a significant amount of their income on rice. The results of rice policy simulations using a CGE model with poverty microsimulation indicate that a tariffication of the quantitative restrictions on rice imports, which maintains the level of protection to the local paddy farmers and the utilization of the generated revenue as cash transfers to targeted vulnerable groups, generates favorable income distribution and poverty reduction effects. Tighter quantitative restriction on rice imports under the rice self-sufficiency program increases the burden on poor households and generates perverse income redistribution from poor to rich.