Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Twentieth Congress
First Regular Session

HOUSE BILL NO. 48

Introduced by Representative RAYMOND ADRIAN SALCEDA

AN ACT
AMENDING SECTION 14 OF REPUBLIC ACT NO. 11203, OTHERWISE KNOWN
AS THE “RICE TARIFFICATION LAW,” TO AUTHORIZE THE USE OF EXCESS
RICE TARIFF REVENUES TO SUPPORT PALAY PROCUREMENT BY THE
NATIONAL FOOD AUTHORITY, TO IMPROVE STORAGE AND
INTERVENTION CAPACITY, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

Republic Act No. 11203, or the Rice Tariffication Law, was enacted to liberalize rice
importation, dismantle quantitative restrictions, and channel tariff revenues toward improving
the productivity and competitiveness of Filipino rice farmers. To that end, the law created the
Rice Competitiveness Enhancement Fund (RCEF), which receives P10 billion annually from
import tariffs to support mechanization, seed development, credit, and extension services.

However, while productivity interventions are necessary, they are not sufficient. In the
short and medium term, rice farmers must also contend with volatile farmgate prices, often
driven down by import surges, opportunistic traders, or harvest gluts. With rising production
costs ~ particularly for fertilizer, fuel, and labor — many rice farmers find palay farming barely
viable at the prevailing buying prices.

The current National Food Authority (NFA) buying price is around 19.00 per
kilogram. Increasing it by P10.00 per kilogram would bring it closer to P29.00/kg, a level
that reflects more closely the true cost structure of efficient farmers in major producing regions.
Based on historical procurement volumes of 300,000 to 500,000 metric tons per year, the
fiscal cost of this proposal is as follows:

Procurement Volume (Metric Tons) | Incremental Cost at P10/kg
- 300,000 P3.0 billion
500,000 P5.0 billion
700,000 i P7.0 billion

This measure proposes to amend Section 14 of RA 11203 to explicitly authorize the
use of excess tariff revenues (above the P10 billion RCEF allocation) to subsidize NFA palay

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procurement. These excess revenues are substantial — 20.3 billion in 2023 alone, and over
P38 billion cumulatively since 2021. Redirecting a portion of this windfall toward price
support will allow the government to close the income gap between rising costs and stagnant
farmgate prices — without violating WTO rules, since the measure remains time-bound,
targeted, and tied to actual output.

Unlike input subsidies, this proposal is outcomes-based. It rewards actual harvest,
incentivizes greater productivity, and sends a positive signal to more competitive and efficient
rice farmers that it is still worth investing in their land, labor, and technology. It is also
geographically self-targeting: only those producing marketable palay near NFA procurement
points benefit.

To ensure effectiveness and reduce wastage, the bill also includes provisions to improve
NFA’s capacity to store, preserve, and rotate stocks. Rice is perishable. Without adequate
drying, storage, and inventory management facilities, subsidized procurement leads to post-
harvest losses, spoilage, and budget inefficiency. By allowing the use of excess tariff revenues
for warehouse rehabilitation, hermetic storage, modular mobile units, and rotation systems, this
bill enhances the sustainability of buffer stock operations.

Finally, the bill directs the creation of a Rice Market Intervention Fund under the
NFA to enable swift deployment of stocks during times of sharp price increases or supply
disruptions. This makes the agency not just a passive holder of rice, but an active tool for
stabilizing both farmgate and retail prices.

This proposal does not repeal or reverse the Rice Tariffication Law. Rather, it
corrects a major omission: the failure to cushion price shocks in a market still transitioning to
full liberalization. By expanding the legal uses of excess rice tariff revenues, we fulfill the
law’s true spirit: to enhance rice farmer welfare and ensure national food security.

In view of the foregoing, the immediate approval of this measure is earnestly sought.

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
‘Twentieth Congress
First Regular Session

HOUSE BILL NO. 48

Introduced by Representative RAYMOND ADRIAN SALCEDA

AN ACT
AMENDING SECTION 14 OF REPUBLIC ACT NO. 11203, OTHERWISE KNOWN
AS THE “RICE TARIFFICATION LAW,” TO AUTHORIZE THE USE OF EXCESS
RICE TARIFF REVENUES TO SUPPORT PALAY PROCUREMENT BY THE
NATIONAL FOOD AUTHORITY, TO IMPROVE STORAGE AND
INTERVENTION CAPACITY, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Section 14 of Republic Act No. 11203 is hereby amended to read as
follows::

“SECTION 14. Use of Excess Tariff Revenues. — Any amount in
excess of the Ten billion pesos (P10,000,000,000.00) annual appropriation
for the Rice Competitiveness Enhancement Fund (RCEF) shall be allocated
by Congress and included in the annual General Appropriations Act (GAA).
These funds shall be used to:

(a) Provide direct financial assistance to rice farmers;
(b) Expand crop insurance coverage;
(c) Fund other programs that enhance rice farmers’ competitiveness

d income, including farm-to-market roads, postharvest facilities, and
igation services; and

(D) PROVIDE SUBSIDIES TO THE NATIONAL FOOD
AUTHORITY (NFA) FOR THE PROCUREMENT OF PALAY AS
PART OF BUFFER STOCK MAINTENANCE AND TO STABILIZE
FARMGATE PRICES.

THE USE OF SUCH EXCESS TARIFF REVENUES SHALL

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BE SUBJECT TO PROGRAMMATIC GUIDELINES JOINTLY
ISSUED BY THE DEPARTMENT OF AGRICULTURE, THE
NATIONAL FOOD AUTHORITY, AND THE DEPARTMENT OF
BUDGET AND MANAGEMENT.”

SEC. 2. Initial Policy Objective. — As an initial implementation measure under this Act,
the Department of Agriculture and the National Food Authority shall endeavor to establish a
palay procurement program subsidized by excess rice tariff revenues that shall support an
increase of at least Ten pesos (P10.00) per kilogram over the prevailing NFA buying price at
the time of this Act’s effectivity, subject to the availability of funds and rice market conditions.

SEC. 3. Upgrading of NFA Storage, Stock Management, and Market Intervention
Capacity. — To ensure the cost-effectiveness and impact of rice buffer stock operations, the
National Food Authority shall be authorized to use a portion of excess tariff revenues, as
appropriated in the General Appropriations Act, for the following:

(a) The modernization or rehabilitation of NFA warehouses and storage facilities to
reduce post-harvest losses, extend shelf-life of milled rice, and enable year-round availability
of stocks;

(b) The adoption of climate-controlled or hermetic storage technologies, where
feasible, to improve inventory quality, especially in typhoon- or flood-prone areas;

(c) The procurement of modular mobile storage and milling units to enable localized
procurement and deployment during emergency or price spike periods;

(d) The implementation of stock rotation protocols and value optimization systems to
minimize spoilage, improve grain tumover, and allow conversion of older stocks into social
safety net supply;

(e) The creation of a Rice Market Intervention Fund within the NFA, funded from
excess tariff collections, to enable swift and targeted retail interventions during periods of
extraordinary price volatility or rice supply disruptions.

Amounts for these purposes shall be specified in the General Appropriations Act and
subject to the guidelines issued jointly by the Department of Agriculture, the National Food
Authority, and the Department of Budget and Management.

SEC. 4. Implementing Rules and Regulations. - Within ninety (90) days from the
effectivity of this Act, the Department of Agriculture, the National Food Authority, and the
Department of Budget and Management shall jointly promulgate the implementing rules and
guidelines to operationalize the provisions of this Act.

SEC. 5. Separability Clause. — If any portion or provision of this Act is declared invalid
or unconstitutional, other provisions hereof shall remain in full force and effect.

SEC. 6, Repealing Clause. — All laws, decrees, orders, rules, and regulations or other

issuances or parts thereof inconsistent with the provisions of this Act are hereby repealed or
modified accordingly.

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SEC. 7. Effectivity. This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.

Approved,

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