University of San Agustin

BASIC EDUCATION DEPARTMENT

SENIOR HIGH SCHOOL
General Luna St., Iloilo City
Student of Humanities and Social Sciences

First Semester A.Y. 2020 2021

“Adverse Impacts of Economic Globalization to Local Farmers of the Philippines : The

Enactment of Rice Tarrification Law”

I. INTRODUCTION

The Philippines is classified as one of the developing countries, having gross domestic
product per capita of 3,485.1 in US dollar currency, as of the year 2019 as stated in the official
data reported by the World Bank.

One of the strategies published by the National Economic and Development Authority
(NEDA) in the Philippine Development Plan for the year 2017-2022 in expanding economic
opportunities in the Industry and Services to increase local and foreign direct investments–do by
removing restrictions, providing incentives, and promoting job-creating investments. This
development plan strategy is expected to induce the Industry and Services sector to be globally
competitive by the year 2022. Along the intention of making the Philippines a globally
competitive country lies the entering of the country to Economic Globalization.

Economic Globalization is an economic trend referring to the increasing interdependence of

world economies–the culmination of escalating trade and economic exchange. Proponents of this
ideology believe that this may be able to deal with inherent problems such as poverty and
unemployment, and will benefit both the developed and developing countries. However,
opposition argues that it only benefitted the riches and further pressed the impoverished to
struggle.

In hopes of strengthening the economy of the Philippines–as an agricultural country–the

government has developed and enacted laws that they hold to positively affect the local
agricultural sector. In the previous year on 14th of February, President Rodrigo Duterte signed

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 University of San Agustin
BASIC EDUCATION DEPARTMENT
SENIOR HIGH SCHOOL
General Luna St., Iloilo City
Student of Humanities and Social Sciences

First Semester A.Y. 2020 2021

the R.A. no. 11203 known as the Rice Tariffication Law (RTL). This law has been made due to
the concern of the country being unable to be rice self-sufficient.

The RTL is the solution that our government came up with in response to rice insufficiency.
This law lifts the limit of rice importations for it has amended the R.A no. 8178 or the
Agricultural Tariffication Act which excludes the rice–continuing to have quantitative import
restrictions. Unrestricted importations of rice to the country will raise competition in the market
between imports and locally produced rice that will directly affect the rice market price.

One of the goals of enacting RTL is to lower rice prices inflation for the consumer masses and
it will be possible by lowering the local producer’s appraisal with the competition forcing them
to do so. The Department of Agriculture (DA) has predicted this to happen, and this is where
they came up with the Rice Competitiveness Enhancement Fund (RCEF). The RCEF allocation
and disbursement will be in forms of machines and equipment, seedling, etc.

The RCEF is said to come from the tariffs imposed on the rice imports to support the local
rice producers in the country as an amendment to the entry of cheap imported rice that will cause
pull down of local rice prices. According to DA, the fund will have an annual appropriation
amounting to 10 billion in Philippine peso for the next six years. The Congress is the one to
handle the allocation of the fund if the tariff collected is higher than the minimum intervention
which is PhP 10 billion for the local farmers.

Local farmers are demanding the government to repeal the enactment of Rice Tariffication
Law as they are suffering with the continuous declining rice prices in competition with the
imported rice.

The Rice Tarrification Law, a step to entering Economic Globalization does not guarantee that
local farmers of the Philippines will be globally competitive; making us doubt that it will only
worsen the farmers’ suffering.

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 University of San Agustin
BASIC EDUCATION DEPARTMENT
SENIOR HIGH SCHOOL
General Luna St., Iloilo City
Student of Humanities and Social Sciences

First Semester A.Y. 2020 2021

II. DIAGNOSIS

The Philippines is an agricultural country and it is a shame that the country is unable to be
rice self-sufficient. The country is 93% self-sufficient and the remaining 7% will come from rice
importations according to DA. This is one of the reasons why RTL was pushed through.

The intention and thought of implementing the RTL is good, but it was not as beneficial as
how it was made to be for the local farmers. After a year of implementation, effects of the
supposed to be target goals for local farmers are still obscure with the unrestricted limit of
imported rice. Competition is what they only experienced in the past year for consumers prefer
cheaper imported rice over locally produced rice that greatly alters the livelihood of the farmers.

As this law opens our country to more importations from other countries, we took a step to
Economic Globalization. Many believe that Globalization affects a country’s national
sovereignty as interdependence among countries is made that can cause imbalance of powers.
This case is undoubtedly Post-colonialism.

The Philippines is exposed to Post-colonialism as the ones benefitting from our economy are
the other countries. United States Department of Agriculture projected this August 2020 that
until 2021 the Philippines will continue to be the world’s largest rice importer with the expected
decline in local production.

Supposedly, RTL will assist them to be able to compete with the global market but what
happened is the other way around. If you’ll look at the components in trading set up, the ones
most likely to benefit are the traders from other countries rather than the local producers as the
imports are cheaper, continuing the local producers’ ordeal for they cannot lower their prices
because of high cost of production.

The issue of RTL is it only opened the country to economic exploitation and did not make our
farmers competitive.

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 University of San Agustin
BASIC EDUCATION DEPARTMENT
SENIOR HIGH SCHOOL
General Luna St., Iloilo City
Student of Humanities and Social Sciences

First Semester A.Y. 2020 2021

III. PROGNOSIS

An approach that we can execute in preventing further economic exploitation in our

agricultural sector is to make our local farmers globally competitive. We must first
strengthen our own before adapting Western perspective and ideas–like the rice liberalization
or RTL–in dealing with our economic issues as it does not objectively correspond with
conditions and development goals in a third-world country like ours. This will be possible if
we are to reform the RTL for it does not make our local farmers globally competitive.

The RCEF that was made to amend the affected farmers of the predetermined decline of
locally produced rice because of the competition in the market should be altered. RCEF
allocates 50% to the Mechanization Program for rice farm machinery and equipment, 30% to
the Seed Program for rice seed development, propagation, and promotion, 10% to the Credit
Program for expanded rice credit assistance, and 10% to the Extensions Services Program for
rice extension services. Instead of allocating the fund collected from the tariffs in a branched
manner, we can just create a development plan that will mend all the aspects affecting the
improvement of the agricultural sector.

The development plan will be focused on increasing the production of rice to stop the
dependency of our country to rice importations. The strategy of this development plan is to
invest in irrigation, funding, research, providing farm inputs, and post-harvest facilities.
Irrigation development will be building of dams and free irrigation conferring with the
National Irrigation Administration (NIA), funding development in accordance with
Landbank, more agricultural research with International Rice Research Institute (IRRI),
provide farm inputs such as chemicals, equipment, etc. to lower production cost, and increase
and improve post-harvest facilities for maintenance of rice quality and minimize losses.

This will take a considerable amount of time and fund but this is a better approach in contrast
to RCEF allocation and disbursement method.

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 University of San Agustin
BASIC EDUCATION DEPARTMENT
SENIOR HIGH SCHOOL
General Luna St., Iloilo City
Student of Humanities and Social Sciences

First Semester A.Y. 2020 2021

IV. CONCLUSION

The Rice Tarrification Law, a law that lifts the restrictions on the amount of rice
importations that causes competition between imported and locally produced rice, where the
local farmers are struggling to keep up with the current prices of imported rice that are
generally lower which the consumer prefers. This does not really make the farmers
competitive in the world market because of the approach and implementation of RTL does
not draw a clear roadmap of plans for the agricultural sector. The Philippines is vulnerable to
economic exploitation by the other countries with RTL that lowered the protection on
quantitative imports, and benefitted the foreign traders. The reformation of RTL should be
considered as it promotes adversity to the local farmers; it is a misstep to enter economic
globalization adapting Western perspective and ideas because it does not correspond in
dealing with the conditions and development of the Philippines, a third-world country. An
approach we must do in dealing with this controversial topic is to strengthen our agricultural
sector by making our farmers globally competitive with the development plan that is focused
on increasing rice production by investing in irrigation, funding, research, providing farm
inputs, and post-harvest facilities.

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 University of San Agustin
BASIC EDUCATION DEPARTMENT
SENIOR HIGH SCHOOL
General Luna St., Iloilo City
Student of Humanities and Social Sciences

First Semester A.Y. 2020 2021

V. REFERENCES

Agricultural Training Institute. (2019). Rice Competitiveness Enhancement Fund. Retrieved

from https://ati.da.gov.ph/ati-main/PROGRAMS/RCEF

GMA Public Affairs. (2019, February 27). Brigada: Pagsasabatas ng Rice Tariffication Law,
ano ang epekto sa mga magsasaka? [Video]. YouTube.
https://www.youtube.com/watch?v=9_LtEAOmw0k

Marcos, Ferdinand Jr. [Bongbong Marcos]. (2019, July 20). BBM VLOG #71: Rice
Tariffication | Bongbong Marcos [Video]. YouTube.
https://www.youtube.com/watch?v=ePdeWubNTf4

Mediola, R. (2020). The Philippines remains the world’s largest rice importer. Retrieved
from https://www.asianjournal.com/philippines/across-the-islands/the-philippines-remains-
the-worlds-largest-rice-importer/

National Economic and Development Authority. (2017). Philippine Development Plan 2017-
2022 Abridged version. Retrieved from http://www.neda.gov.ph/wp-
content/uploads/2017/12/Abridged-PDP-2017-2022_Final.pdf

The World Bank. (2019). GDP per capita (current US$) – Philippines. Retrieved November
1, 2020 from
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2019&locations=PH&name_d
esc=false&start=1960&view=chart

Unitarian Universalist Association. (2003). Economic Globalization 2003 Statement of

Conscience. Retrieved from https://www.uua.org/action/statements/economic-globalization

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 University of San Agustin
BASIC EDUCATION DEPARTMENT
SENIOR HIGH SCHOOL
General Luna St., Iloilo City
Student of Humanities and Social Sciences

First Semester A.Y. 2020 2021

Youmatter. (2020). Globalization: Definition, Benefits, Effects, Examples – What is

Globalization?. Retrieved from https://youmatter.world/en/definition/definitions-
globalization-definition-benefits-effects-examples/