MANILA - The government is in constant contact with Thailand on the issue of cutting rice tariff rates under a Southeast Asia-wide trade deal, the head of the Agriculture department told reporters yesterday.

The announcement came a day after Thailand threatened to delay an Association of Southeast Asian Nations (ASEAN) free trade deal unless the Philippines makes tariff cuts on rice that is acceptable to the former, which is one of the world’s biggest rice exporters.

"The President is going to Thailand for the [15th ASEAN Summit this Oct. 23-25 in Hua Hin town], but even as she goes or stays [sic], we are in touch with Thailand directly," said Agriculture Secretary Arthur C. Yap at the sidelines of the 35th Philippine Business Conference and Expo in Manila.

"Negotiations are in play," he stressed, refusing to give details.

The 10 ASEAN members are expected to ratify this week the ASEAN Trade in Goods Agreement (ATIGA).

Focal to ATIGA is a schedule of reduction and complete removal of tariffs. Under ATIGA, the Philippines is supposed to cut rice tariffs to 20% by January 1 next year from the current 40%.

Manila has asked that rice be kept on the list of goods classified as "highly sensitive" which are allowed a 35% tariff rate.

Last Monday, however, a Reuters report said Thai Commerce Minister Porntiva Nakasai could not accept Manila’s offer to compensate for its delay in cutting tariffs on rice by giving Thailand an annual tariff-free quota of 50,000 MT, saying this was too small. Thailand wants to be able to export up to 360,000 MT duty free, Reuters had reported.

"I think at the end of the day — whatever and however we balance it, it is going to be good for the Philippines," Mr. Yap said, without giving further explanation.

The Philippines, which imports a tenth of its rice needs each year, has so far imported 1.775 million MT this year, down from the record 2.3 million MT last year.