Widespread practice of alleged illegal price manipulation prompted President Ferdinand R. Marcos, Jr. to issue a nationwide cap for rice to ensure the food staple will remain affordable.
Citing the provision of Republic Act No. 7581 or the Price Act, the chief executive issued Executive Order (EO) No. 39 last Thursday imposing the following mandated price ceiling: P41.00 per kilogram for regular milled rice (RMR) and P45 per kilogram for well-milled rice (WMR).
The mandated price ceilings will remain in effect unless earlier lifted by the President upon recommendation of the Price Coordinating Council or the Department of Agriculture (DA) and the Department of Trade and Industry (DTI).
In a statement, DTI Secretary Alfredo E. Pascual said the price ceiling for imported rice will be based on the Bureau of Custom’s reference price.
Marcos issued EO 39 after DA and DTI got reports of alleged rampant practice of price manipulation through hoarding by opportunistic traders and collusion among industry cartels amid the lean season international developments that affect prices of basic goods such the Russia-Ukraine conflict, India’s ban on rice exportation, and unpredictable price of oil.
Soaring prices
Based on the price monitoring of DA in Metro Manila, the retail price for local commercial RMR ranges from P42 to P55, while for WRM it ranges from P47 to P56 as of August 31, 2023.
During the same period, the price of premium rice (PR) is sold at a higher price ranging from P48 to P60, while special rice (SR) remain the most expensive with price ranging from P54 to P65.
This despite the projection of the DA that the country will have a 10.15 million metric tons (MMT) rice supply during the second half of the year, which it noted will be sufficient to cover the current demand of 7.76 MMT.
“The current surge in retail price of rice in the country has resulted in a considerable economic strain on Filipinos particularly those who are underprivileged and marginalized,” Marcos said.
“In light of the current situation, it is crucial and urgent for the State to guarantee that basic necessities are not only sufficient but also reasonably priced and conveniently accessible to every Filipino,” he added.
Intensified campaign
The President ordered DA and DTI to impose the price ceiling starting on September 1, 2023 in the markets with the assistance from the Department of the Interior and Local Government (DILG).
“The real problem is in NCR (National Capital Region). Not so bad outside of Metro Manila. That is why we will be focusing our efforts in Metro Manila,” Marcos said in an interview with reporters after officially declaring Palawan Island as insurgency-free last Friday.
He urged the public to report to the DA or their local government units (LGU) any unscrupulous retailer, who will sell rice over the price ceiling under EO 39.
The Bureau of Customs (BOC) will intensify its ongoing inspection raids of rice warehouses to combat hoarding and illegal importation, while the Philippine Competition Commission will go after rice cartels, which abuse their dominant position in the market.
DA will share with the BOC relevant information such as the inventory of rice stocks, the list of accredited rice importers, and the location of rice warehouses.
Artificially low
Federation of Free Farmers (FFF) National Manager Raul Q. Montemayor expressed concern over the potential negative impact of the EO 39 to rice farmers and traders since it made the prices of the food staple artificially low.
He noted this may compel retailers not to sell their rice stocks or to make their RMR and WMR appear to be of a higher grade, which can be sold at a higher price.
Likewise, the low price can also prompt farmers to no longer plant rice, which will further reduce the country’s supply of the food staple.
The President, he said, may have not be given accurate prognosis and recommendations on the appropriate price, when he decided to issue EO 39.
“I think at P22-25 per kilo dry basis (palay), the farmers will be happy. That will mean retail prices of P45 to 50 per kilo,” FFF head told BusinessMirror in a Facebook message.
Support mechanism
Last Tuesday, Marcos assured the government will provide farmers and retailers, who will be affected by the “legal tools” they will use to regulate the price of rice, support mechanisms.
BusinessMirror asked DA about the said support mechanism, but as of press time it has yet to issue a reply on the said matter.
EO 39 did not mention any such support mechanism.