Received: 02 September 2023 | Accepted: 30 December 2023 | Published Online: 31 December 2023

Recoletos Multidisciplinary Research Journal Vol. 11 no. 2 (December 2023)

DOI: https://doi.org/10.32871/rmrj2311.02.08

The Sectoral Impact of the Rice Tariffication Law on Filipino Rice

Supply: A Time-Series Analysis
Aaron Benjmin Alcuitas and Josephine Petralba*
School of Computer Studies, University of San Jose-Recoletos, Cebu City, Philippines
Email Correspondence: [email protected]

Abstract
The Rice Tariffication Law was implemented in March 2019 to address rice shortage by
replacing quantitative restrictions with import tariffs. Prior studies have evaluated its various
impacts, but no study has analyzed post-RTL seasonal rice supply data by sector. This study
is a quasi-experimental, interrupted time-series analysis using ARIMA models applied to
2011-2020 data. The control group consists of observed values and the experimental group
consists of ARIMA-forecasted values post-RTL. Research findings indicate that RTL does not
affect rice supply trends in the overall rice supply and household sector. Conversely, in the
commercial and NFA sectors, RTL has been observed to significantly influence rice supply
trends. This reveals the ways in which RTL altered the dynamics within these sectors, thereby
impacting their respective supply trends by influencing local production, buffer stock, and
importation. The actualization of RCEF, buffer stock increase, and the development of plans
to enhance agricultural sustainability are recommended.

Keywords: agricultural and natural resource economics, rice tariffication law, rice sector, rice
supply, interrupted time-series, ARIMA, Philippines

1.0 Introduction supplies high and prices low while still protecting
After losing its self-sufficient status in local farmers (Department of Agriculture, 2019;
rice, its main staple, the Philippines became a Tobias, 2019). RTL’s struggle in balancing lower rice
net rice importer and has failed to regain self- prices for consumers and high profits for farmers
sufficiency since. Quantitative restrictions (QRs) has consistently raised the question, “Does the
were employed to protect local farmers from the RTL generate a net benefit or loss to the Philippine
negative impacts of importing rice, allowing rice Rice Sector?”, and continues to do so as President
to be imported only under a minimum access Marcos Jr. has recently asked for a reassessment of
volume (MAV), with the National Food Authority RTL (De Vera, 2022). To address the question, this
(NFA) put solely in charge of importation and price study will explore the impact of RTL on rice supply
stabilization. With the depletion of NFA rice stocks, on the different sectors of the Philippines. This
the Rice Tariffication Law was enacted in response study has three objectives: (1) to visualize trends in
to the surging inflation of rice price during the supply before and after RTL within each sector and
final quarter of 2018 (Tobias, 2019). Quantitative in total, (2) to forecast supply values assuming RTL
restrictions on rice were replaced with tariffs, which was not implemented and compare the predicted
allowed for more importation through the Rice values with the observed within each sector
Tariffication Law (RTL), which sought to keep rice and in total, and (3) to analyze the results and
86 Recoletos Multidisciplinary Research Journal Vol. 11 no. 2 December 2023

provide recommendations to improve the state cross-sectional research design which exposed
of Philippine rice supply. The accomplishment of the dissatisfaction of farmers on the effects of RTL,
these objectives will benefit three stakeholders: (i) and Casinillo (2022) built on his previous result to
policymakers in the assessment of an intervention suggest that the majority of farmers are low-profit
for depleting rice supply’s effectiveness in solving and low-happiness post-RTL. Briones (2021) found
the problem, (ii) sector employees in the awareness lower rice prices but proposed that these cause an
of where their sector is trending towards in terms of increase in poverty, contrary to Balié et al. (2021),
rice supply with recommendations to amend issues, making it beneficial for consumers but harmful
and (iii) other researchers in their synthesizing of for farmers, consistent with Balié et al. (2021). The
this study’s results to others relating to agriculture, literature is strong in that they are all data-based
government interventions, and economics. and facilitated by those with expertise, but they
The Rice Tariffication Law, was implemented need to be more in-depth and lack the timeliness
to liberalize the rice industry, can impact the of the data used.
availability and prices of rice, a staple food for many There are four main gaps in the existing
low-income families. Government programs aimed literature, namely, (a) the absence of analysis on
at assisting the less privileged (Geniston et al., 2015) supply trends as a result of RTL, (b) the neglect
could be influenced by the changes in rice prices to consider the sectors within the Philippine Rice
and availability resulting from implementing this Sector, (c) the lack of studies utilizing time-series
law. Many studies have since attempted to answer data post-RTL, and (d) the failure to account for
this question on various impacts of the RTL, such as autocorrelation, possible non-stationarity, and
on supply, import, production, price, welfare, and seasonality in data. Most studies did not use data
distribution by utilizing surveys, partial equilibrium after the implementation of RTL after 2019, which
models, econometric models, linear regression, disabled them from analyzing trends post-RTL.
K-means clustering, and authors’ calculations (Balié Some also chose a small locale, such as certain
& Valera, 2020a ; Balié et al., 2021; Briones, 2021; provinces and the rice sector as a whole rather than
Calicdan et al., 2020; Casinillo, 2020; Casinillo, 2022; the whole country and each sector, which limited
Estadilla, 2022; Vertudes et al., 2020). Various angles the potential for the results to be holistically
on the positive and negative impacts of RTL have analyzed. No study has used ARIMA models,
been explored by prior studies. On the positive side, which is unusual given the autocorrelation and
Balié and Valera (2020a) found higher imports and seasonality in rice data. These weaknesses likely led
lower prices of rice post-RTL. Calicdan et al. (2020) to the results being equivocal. This study, then, is
determined that the effects of RTL on production, necessary to close all unanswered questions from
satisfaction, and government budgets on rice were previous studies particularly on the supply trend
all both directly proportional and low. Balié et al. effects of RTL.
(2021) discovered that because of lower rice prices, The null hypothesis is that the supply trend
RTL reduced poverty at the expense of farmers. has not changed due to the failure of RTL to impact
Estadilla (2022) agrees with these results, adding the factors of rice supply, which will be discussed
that despite the loss in production, rice supply is in the conceptual framework, and the alternative
improved due to imports and lower prices, and hypothesis is that the supply trend has changed
shows that RTL gives a net benefit to society. Other either due to the effectiveness of RTL to influence
studies, however, show negative results. Casinillo the factors. Recommendations will then be made
(2020) and Vertudes et al. (2020) both used a to improve the explored situation on rice supply
https://doi.org/10.32871/rmrj2311.02.08 Alcuitas & Petralba 87

trends. In summary, this paper seeks to evaluate the transfer of the regulatory function of the NFA to
the effectiveness of RTL in terms of Philippine the Bureau of Plant Industry (BPI), and the provision
rice supply trends for the benefit of policymakers, of a Special Rice Safeguard (Tobias, 2019). RTL was
sector employees, and other researchers. Related created as an intervention to the surging inflation
literature will be reviewed before the methods of rice price on 2018, rising by 13% from the past
used will be enumerated, the results shown and year, after the shortage of NFA rice. Even though
discussed, recommendations will be made and the NFA commissioned the import of 500 thousand
the paper concluded. The thesis statement is as metric tons in early 2018, this was reduced to
follows: “The Rice Tariffication Law has impacted two days’ worth which indicated a rice crisis in
Philippine rice supply among its different sectors.” the country (Neo, 2018). As the NFA is required
to maintain a 15-day stock at any given time, the
Conceptual Framework rice crisis, along with soaring prices and weevil
This study’s conceptual framework is drawn infestations, required an intervention in the form
from Cororaton (2004) which shows three major of RTL (Evangelista, 2018). However, a side effect
components that affect the Philippine rice supply, of RTL would be that local farmers would have
namely, local production from farmers, buffer to compete with the low prices of imported rice.
stock kept by the NFA, and imports especially from Hence, RTL mandates the RCEF as a fund to support
Thailand and Vietnam. These factors are integral to farmers in machineries, development, credit, and
the research question because the RTL affects all education using tariff revenues. With its own pros
three factors, which in turn impacts the trend of and cons, the RTL has always been controversial,
rice supply among the different sectors. with some groups expressing support and others,
such as the Federation of Free Farmers (FFF), calling
for amendments on the law (Briones, 2021).
Philippine Rice Sector. The sector is divided
into three sectors whose rice stocks the Philippine
Statistics Authority (PSA) keeps inventory of,
namely, household, commercial, and the NFA.
The household sector includes farming and non-
Figure 1. Conceptual Framework farming households, while the commercial sector
includes registered grains businessmen monitored
Literature Review by the NFA (Philippine Statistics Authority, 2016).
Rice Tariffication Law. Signed into law by The NFA sector has a special role to stabilize rice
President Duterte on February 14, 2019, the prices by buying high from small farmers, selling
Rice Tariffication Law amends the Agricultural low, and exercising its monopolistic right, pre-RTL,
Tariffication Act of 1996 by replacing its quantitative to import rice to fill supply gaps (Department of
restrictions on rice with tariffs (Philippine Rice Agriculture, 2019). This distinction means that the
Research Institute, 2019). A greater rice supply is the NFA sector keeps cheaper rice compared to the
expected outcome due to increased importation commercial sector.
without the limitations set by QRs, which would Supply Effects. Estadilla (2022) used partial
then lead to lower rice prices. Some other key equilibrium analysis to study how the RTL affects
provisions of the law include the creation of the domestic rice supply. It found that the total
Rice Competitiveness Enhancement Fund (RCEF), domestic rice supply will substantially increase
88 Recoletos Multidisciplinary Research Journal Vol. 11 no. 2 December 2023

post-RTL due to importation, despite a reduction Sector, which renders current studies on rice supply
in production. incomplete. Third, no study has used the time
Import Effects: Balié and Valera (2020a) used series data on Philippine rice supply after 2019,
partial equilibrium models to test the impacts which would’ve given a more holistic evaluation
of RTL on imports, and its simulation results of RTL after it was implemented. Fourth, no study
suggested that the RTL would increase imports by has utilized an ARIMA model for RTL, which means
20.7% in 2019. that previous studies failed to account for the
Production Effects. Estadilla (2022) found a autocorrelation, possible non-stationarity, and
huge reduction in domestic rice production in seasonality present in time-series data on rice
the short and long-term due to lack of producer supply, if used at all. The study will explore the
protection. Calicdan et al. (2020) in their time series impact of RTL on rice supply in the different sectors
analysis on RTL from 1992-2019 production, price, of the Philippines in an interrupted time-series
and budget data discovered that government analysis approach, using time-series data from
budget has a positive effect on rice production. 2011 to 2020 and fitting them to ARIMA models for
Price Effects. Estadilla (2022), Balié et al. (2021), forecasting to address these gaps.
Briones (2021), and Balié and Valera (2020a) all
found a reduction in rice prices as a result of RRL, 2.0 Methods
though the latter also found a slight increase in Research Design
world and Southeast Asian rice markets. This study will utilize a quasi-experimental,
Welfare Effects. Estadilla (2022) and Balié et interrupted time-series research design as it seeks to
al. (2021) concluded that net societal welfare is evaluate an intervention and demonstrate causality
improved overall due to lower rice prices at the without randomization. Monthly rice supply data on
expense of producers. Calicdan et al. (2020) found the household, commercial, and NFA sectors and
that there is a positive relationship between farmers’ total rice supply from 2011-2020 will be used so as
profit and happiness and both were relatively low to identify trends pre-RTL and post-RTL. The dataset
due to RTL, while Casinillo (2020), Vertudes et al. used is titled “Rice and Corn: Monthly Total Stocks
(2020), and Casinillo (2022) found low satisfaction Inventory by Sector,” retrieved from OpenStat PSA.
rates among farmers from RTL, with the former The training data will comprise the pre-RTL data,
two using surveys and the latter using regression which will be fed to the Autoregressive Integrated
modelling and K-means clustering. Moving Average (ARIMA) models that will create
Distribution Effects. Balié and Valera (2020a) forecasts for the post-RTL months. The control
discovered a fall in total inflation and poverty, group, which is the forecasted data assuming the
but contrary to this, Briones (2021) found that the absence of intervention, and the experimental
lower price of rice slightly increases poverty. Balié group, which is the observed data with the presence
et al. (2021) concluded that RTL is beneficial for of RTL, will be compared to discover the impacts of
consumers but harmful for farmers. RTL on their moving averages or trends, according
Gaps. There are four main gaps in the existing to the presented hypotheses, for each category. The
literature. First, there is no analysis of how RTL results will then be analyzed using the hypothesis
affects the trend of the Philippine rice supply, which analysis technique. Monthly data from 2011-2020
is the immediate problem for which the policy was is used as the intervention was implemented in
made. Second, no study has considered the supply March 2019, which allows about a 5:1 split of data
in the three sectors composing the Philippine Rice points between the pre-RTL period (Jan 2011-Mar
https://doi.org/10.32871/rmrj2311.02.08 Alcuitas & Petralba 89

2019) and post-RTL period (Mar 2019-Dec 2020). observations are differenced (degree of
Though lockdowns due to the COVID-19 pandemic differencing) for the non-seasonal component.
started in the Philippines in March 2020, these had • q: The size of the moving average window
little to no impact on the total rice supply, at least in (order of moving average part) for the non-
the short term (Balié & Valera, 2020b). Any possible seasonal component.
effects caused by lockdowns on sectors will be And for the seasonal component:
explicitly mentioned in the discussion of results, • P: The number of lag observations included in
which stand as sufficient post-RTL; pre-lockdown the model (lag order of autoregressive part) for
data is forecasted. Hence, there will be a total of the seasonal component.
480 samples, evenly distributed, with 120 samples • D: The number of times that the raw
for each of the four categories: household sector, observations are differenced (degree of
commercial sector, NFA sector, and total rice supply. differencing) for the seasonal component.
The data for the first three categories is stored in • Q: The size of the moving average window
individual XLSX files, while the latter is calculated (order of moving average part) for the seasonal
by the sum of each value in the former categories component.
to avoid errors. • S: The number of time steps in each season.
The differencing order is 0 if the data is
Data Analysis and Arima Model stationary and 1 if it is not, which is determined
In Google Colaboratory, a Web Integrated by submitting the data to an Augmented Dickey-
Development Environment (Web IDE) for Python, Fuller Test (ADF Test) from Pmdarima. Pmdarima’s
the data is loaded using Pandas and visualized auto_arima method is fitted with the training data
using Matplotlib. The moving averages with a and utilizes hyperparameter tuning techniques to
window of 12 are also calculated using Pandas find the optimal values for the other parameters.
to visualize trends. ARIMA models are used for The identified parameters are then used for
forecasting values in each category as they the tuned model, which predicts the values
consider autocorrelation, non-stationarity, and for dates not covered by the training data. The
seasonality common in rice supply data which predicted data and their moving averages are also
improve the accuracy of forecasts and reduce bias, determined and compared with the observed data
unlike other models that fail to consider the short to assess the effects of RTL on rice supply. P-value
and long-term trends (Schaffer et al., 2021). hypothesis testing is used with a set confidence
The seasonal ARIMA takes on the form ((p, d, q) level of 95% to discuss the results.
× (P, D, Q)S). The lowercase letters represents non-
seasonal data, as p is the autocorrelation order, d is 3.0 Results and Discussion
the differencing order for stationarity, and q is the Table 1 shows the values calculated for ARIMA
moving average order, while the uppercase letters Model Fitting and the mean difference from
represent their seasonal counterparts. S is the time forecasting. The Boolean values on the second
span of seasonal trend, which is set to 12 in this column describe the stationarity of data. Since
study as the model is fitted with monthly. the household data is non-stationary, its d-value
• p: The number of lag observations included in in the fit model is 1. The other parameters in the
the model (lag order of autoregressive part) for fit model column other than seasonal trend time
the non-seasonal component. span were determined by Pmdarima’s Auto ARIMA.
• d: The number of times that the raw The values on the mean difference column were
90 Recoletos Multidisciplinary Research Journal Vol. 11 no. 2 December 2023

calculated by subtracting all forecasted data from all a LB p-value of above 0.05, the null is accepted
corresponding observed data and taking the mean, and the residuals are independent for all models,
thus defining either the average increase (for positive meeting an assumption. Heteroscedasticity
values) or the average decrease (for negative values) checks whether the error residuals have the same
of rice stock because of RTL. The p-value between variance using White’s test. For the model on the
the observed and forecasted samples determines household sector, the null is accepted and this
the statistical significance of the results and will be fulfills an assumption. However, for the other two
used in hypothesis testing. models, the null is rejected which means that the
Table 2 includes selected p-values from the residuals show variance and signifies irregularities
summary of each model for evaluation. Each test a in forecasting. The Jarque-Bera test examines
different assumption of the model, and the p-value whether the errors are normally distributed.
would need to be less than or equal to 0.05 to The model for the household sector fulfills the
reject the null hypothesis of the test. For all models, assumption, but the other models do not as their
the L1 p-value is less than 0.05, which means that errors are not normally distributed. Overall, since
all terms are statistically significant, which meets all terms in all models are statistically significant
an assumption. The Ljung-Box test determines and the errors are white noise, the ARIMA models
whether the residuals are independent and that generally fit the assumptions needed for sound
the errors are white noise. Since all models have forecasting.

Table 1. ARIMA Model Fitting and Results

Sector ADF Test Fit Model Mean Diff. p-value
Household 0.01, False (0,1,2)(0,1,1)12 26.0778 0.4255
Commercial 0.24, True (1,0,0)(0,1,1)12 -111.5917 0.0079
NFA 0.33, True (2,0,0)(4,1,0)12 78.9756 0.0069
Total N/A N/A -6.5383 0.9941
Note: Mean Difference is in thousand metric tons

Table 2. Summary of ARIMA Model per sector

Sector\p-value L1 Ljung-Box test Heteroskedasticity Jarque-Bera test
Household 0.00 0.79 0.93 0.40
Commercial 0.00 0.97 0.00 0.00
NFA 0.00 0.51 0.01 0.00

Figure 2 visualizes the time-series data of rice harvest during the respective dry and wet seasons
supply, forecasted rice supply, and their respective (Gutierrez et al., 2019). A visual inspection of the
moving 12-month averages. Considered by figure also shows that rice stock trends post-RTL
ARIMA in forecasting, seasonality patterns can be remains more or less unchanged for the household
observed in the data for all sectors except the NFA, sector and the Philippine rice sector as a whole.
which maintains the rice buffer stock (Carpio, 2020). However, commercial rice stock clearly appears to
Rice supply peaks at May and November and dips be trending downward post-RTL, while NFA rice
at March and September, both coinciding with rice stock also clearly appears to be trending upward.
https://doi.org/10.32871/rmrj2311.02.08 Alcuitas & Petralba 91

Figure 2. Monthly Time Series of Rice Supply Data and Forecasts for the Household, Commercial,
and NFA Sectors and Total Rice Stock

Household Sector. The mean difference of 26 imports, according to the conceptual framework,
thousand metric tons may suggest that RTL has does not change the needs of Filipino households.
caused an upward trend on household rice stock, Having a p-value of 0.4255, the forecast for the
but this is amended by a visual inspection of the household sector exceeds the 0.05 alpha and is not
figure. The difference in rice stock is generally statistically significant.
negligible, only beginning to increase gradually Commercial Sector. With a mean difference of
in March 2020, when lockdowns begun due to the -112 thousand metric tons and verified by visual
COVID-19 pandemic. From that point, both rice inspection, the RTL’s negative impact on rice supply
panic buying and rice subsidies have impacted is most salient in the commercial sector. Without
household supply (Balié & Valera, 2020b; Gudmalin RTL, the forecasted data showed an upward trend,
et al., 2021), meaning the subsequent increase which is contrary to the downward trend shown
is likely not because of RTL. This is verified by by the observed data. Since the downward trend
taking the mean difference of household rice of observed data has been consisted before and
supply post-RTL and pre-lockdowns, equating to during COVID-19 lockdowns, the latter does not
only -6.327635583333335 thousand metric tons. affect these results. A possible explanation for
This result is not unusual because households this downward trend is that, even though the
will always demand rice regardless of economic commercial sector can exclusively import rice
policies, and it is in fact the other sectors that adjust under RTL, this also means that a percentage of
their rice supply for the households’ needs. The RTL, their stocks depend more on imports, which are
which impacts local production, buffer stock, and negatively affected when suppliers do not or cannot
92 Recoletos Multidisciplinary Research Journal Vol. 11 no. 2 December 2023

export which is likely because the international in buffer stock and stabilized by an indefinite
rice market only has five significant rice-exporting increase of imports. The stabilization effect caused
countries (Carpio, 2020; Clarete, 2018). Another by an interplay between the three sectors can also
explanation would be the reduction in local be observed in the figure, as the post-RTL data
production (Estadilla, 2022). Both explanations oscillate on closer moving averages compared to
are consistent with the conceptual framework as the pre-RTL data whose moving averages shift up
local production and imports are impacted by RTL, or down over time. However, in the perspective of
leading to the change in commercial rice supply the total rice stock, the null hypothesis is proven
trends. Having a p-value of 0.0069, the forecast for due to having a p-value of 0.9941, which exceeds
the commercial sector falls below the 0.05 alpha the 0.05 alpha and proves that the forecast is not
and is statistically significant. Thus, in the case of statistically significant.
the commercial sector, the alternative hypothesis In general, this study has three key findings:
is proven. (1) that the Rice Tariffication Law has no significant
NFA Sector. With a mean difference of 79 impact to Philippine household rice supply and
thousand metric tons, which was also verified total rice supply, (2) that the Rice Tariffication Law
by visual inspection, the RTL’s positive impact on has negatively impacted Philippine commercial rice
rice supply is clear in the NFA sector. A downward supply, and (3) that the Rice Tariffication Law has
trend in NFA rice supply was forecasted assuming positively impacted Philippine NFA rice supply.
the absence of RTL, which would’ve repeated The Rice Tariffication Law has no significant
the 2018 rice shortage and inflation. Since the impact on the Philippine household rice supply and
observed upward trend is consistent before and total rice supply. The null hypothesis is proven for
during COVID-19 lockdowns, the latter also does both sectors, which is likely due to the constant
not affect the results. This change to an upward demand within Filipino households for rice that
trend can be explained due to RTL’s provision in is unaffected by the law or its effects, as well as
maintaining only the NFA’s emergency buffer- an interplay within the different factors which
stocking mandate which can only be sourced balance out the total rice supply. This finding
from local farmers (Carpio, 2020; De Vera, 2022), disproves the projection from Estadilla (2022)
which makes it less prone to supply shocks pre- that total rice supply and domestic consumption
RTL even if there is a decrease in local production would substantially increase post-RTL but
and an increase in imports (Balié & Valera, 2020a). supports the finding that there is an increase in
With a p-value of 0.0079, the forecast for the NFA imports and a decrease in production, both of
sector falls below the 0.05 alpha and is statistically which subsequently result in the RTL having little
significant. Thus, in the case of the NFA sector, the to no impact on total rice supply. With regards to
alternative hypothesis is proven. the conceptual framework, it has shown that the
Total Rice Stock. The mean difference of -7 RTL has not influenced the factors of supply and
thousand metric tons suggests that the RTL has so it has not influenced supply. Furthermore, the
not caused a significant change in total rice supply study also exposes the apparent seasonality in rice
trends. Referring to the previous discussions supply data for both sectors.
and the conceptual framework, this lack of trend The Rice Tariffication Law has negatively
change is caused by the definite decrease in impacted the commercial rice supply in the
production being balanced out by the increase Philippines. The alternative hypothesis is proven for
https://doi.org/10.32871/rmrj2311.02.08 Alcuitas & Petralba 93

the commercial rice supply, with a negative mean farmers have been receiving more patronage due
difference signifying that rice supply has generally to RTL, at least in the NFA sector, due to an increase
and significantly decreased. This finding does not in NFA rice supply that may be sourced only from
contradict Balié and Valera (2020a) which suggested them. With regards to the conceptual framework, it
that the RTL would increase imports, but rather has shown that the RTL has influenced buffer stock,
suggests that the reduction in rice production which then influences supply.
(Estadilla, 2022) and price (Balié & Valera, 2020a;
Balié et. al, 2021; Briones, 2021; Estadilla, 2022) 4.0 Conclusion
outweigh the impact of imports in influencing rice Since its implementation in March 2019, the
supply in the commercial sector. If such is the effect Rice Tariffication Law has been a contentious issue
observed, it would further support the findings with policymakers, consumers, farmers, and other
of related literature on welfare and distribution, stakeholders discussing its various impacts. Years
specifically on how lower rice prices improve net have been spent in quantitative and qualitative
social welfare and decrease poverty at the expense researches that help evaluate the policy, with
of producers (Balié & Valera, 2020a; Balié et. al, equivocal results. In an effort to give a more
2021; Estadilla, 2022), due to the masses having definitive answer and a holistic discussion to the
better access to more, imported rice. However, issue of rice supply, this study analyzes Philippine
this neither proves nor disproves the finding that sector rice supply trends using ARIMA models
profit, happiness, and satisfaction of farmers were in a quasi-experimental interrupted time-series
negatively affected by RTL (Calicdan et al., 2020; research design with monthly rice supply data from
Casinillo, 2020; Vertudes et. al, 2020) as this would 2011-2020. The control group is the observed data
depend on how much rice in the commercial sector while the experimental group is the forecasted
is bought from local farmers, which is information data. The null hypothesis is that RTL has not
that goes beyond the scope of this study. With impacted the supply trend while the alternative
regards to the conceptual framework, it has shown hypothesis is that the RTL has impacted the supply
that the RTL has influenced imports and local trend. The results show that the null hypothesis is
production which then influences supply. proven for the household sector and the total rice
The Rice Tariffication Law has positively supply, while the alternative hypothesis is proven
impacted Philippine NFA rice supply. The alternative for the commercial and NFA sectors, whose trends
hypothesis is proven for the NFA rice supply, with a have shifted downward and upward, respectively.
positive mean difference signifying that rice supply The thesis statement, “The Rice Tariffication Law
has generally and significantly increased. Aside has impacted Philippine rice supply among its
from the reduction of prices as stated by the related different sectors,” is proven, that even when the
literature, this finding introduces a new positive household and total rice supply trends appear
impact on price, which is the stabilization of NFA to be unaffected, there is a noticeable change in
rice supply. Since NFA rice has become less prone trends among the commercial and NFA sectors and
to supply shocks, prices have also become unlikely an apparent stabilization in the total rice supply
to spike, supporting the related literature on the data. The study, then, uncovers the intricacies
RTL’s positive impacts on welfare and distribution. of the RTL’s effect on rice supply, which is that it
On their negative impacts, this finding slightly has changed the dynamics of supply among the
contradicts them because it suggests that local sectors rather than the rice sector as a whole to fix
94 Recoletos Multidisciplinary Research Journal Vol. 11 no. 2 December 2023

the problems it has encountered pre-RTL. Because References

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rice-tariffication-in-the-philippines-worsen-income-
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First, the RCEF provision of the RTL, which consists Calicdan, J. P. J., Gavino, C. J., Estrada, H. F., Cortez, J. M.,
of rice farm mechanization, rice seed development & Balaria, F. E. (2020). Effects of rice liberalization law
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opportunities for on-farm diversification (Balié et budgets. International Journal of Advanced
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2020). Third, the country’s dependence on rice in rice farming under Philippine rice tariffication
law. Journal of Research and Multidisciplinary, 3(2),
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