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President Rodrigo Duterte is unlikely to veto the rice tariffication bill, which is now with his office despite a strong lobby against the proposed measure by industry stakeholders, Budget Secretary Benjamin Diokno said on Wednesday.

In his regular weekly forum, Diokno said they sent a memorandum to the President strongly urging him to sign the rice tariffication bill.

"I understand there is a strong lobby for the veto but let’s wait. It could either lapse into law or the President will approve it. But certainly, a veto is not possible, I think. I am confident," he said.

Congress transmitted to the Office of the President the "Act Liberalizing the Importation, Exportation, and Trading of Rice, Lifting for the Purpose the Quantitative Import Restriction on Rice, and for Other Purposes" on January 15.

Rice industry stakeholders have been urging Duterte to veto certain provisions of the bill, particularly the removal of the regulatory authority of the National Food Authority.

According to Alyansa ng Industriya Bigas (Alliance of the Rice Industry), the deregulation of the NFA would mean "import-all-you-can scenario."

Diokno explained that Duterte's power to exercise the line-item veto is applicable only to budget, taxes, and tariff.

In the case of the rice tariffication bill, Duterte could not exercise his line-item veto power.

"No, there’s no line item veto for the tariffication. In fact, the NFA people were with me yesterday and they are talking of how you do these things…for example, they are going to lose the regulatory function under the bill so they are prepared for it. They are going to lose the food health responsibility so I think they are ready. They have admitted that there’s no turning back if the reform on the NFA will take place," Diokno said.

Asked if the NFA's debt would be affected by the reform, he said, "the NFA is indebted to the tune close to P200 billion...the Department of Finance will find a solution to that. That will remain part of our debt, national government and government corporate debt."

Diokno said the government has to put pressure on the agriculture sector, including the rice industry, "to improve its productivity because right now they are not competitive."

"Our production cost is much much higher than the world price of rice, for example. So maybe it could be a better strategy to focus on high-value crops instead of rice," he said.

In the case of sugar, which the government also wants to liberalize, he said this sector is not competitive.

"Our cost of sugar is more expensive than the production cost of Indonesia, which is the major exporter of ( instant coffee mix) Kopiko. We cannot compete with Kopiko so our agriculture also affects our...so-called food manufacturing...so in designing the policy, you have to look for the greatest good for the greatest number," he said.

"How many farmers could be affected? For example in sugar, maybe at best maybe around a million, estimate is 800,000 but how many consumers are there? Are you going to protect the 800,000 and let the 105 million consumers suffer plus our potential? As I said, our exports are kind of staggering right now because we cannot compete," Diokno explained.

He expressed disappointment on the dismal performance of the agriculture sector for the past decades.

"Looking at 2018 gross domestic product growth by industrial origin, the agriculture sector contributed a measly 0.1 percentage point to the full-year growth rate of 6.2 percent. Simply put, the farm sector had virtually zero contribution to economic growth last year," he said.

He said the Duterte administration is now prioritizing the agriculture sector, which has the potential to grow by 3-5 percent annually.

Except for the administration of former President and now Manila Mayor Joseph Estrada when agriculture sector expanded by 6.5 percent, Diokno said the sector had not grown much because the government was not focusing on the right things.

"We’ve been trying to protect agriculture. Secondly, if you remember most of the corruption on the last two decades happened on the agri(culture) sector," he said, citing the fertilizer fund scam during the Arroyo administration.

Diokno was the budget chief of Estrada. Celerina Monte/DMS