President Ferdinand R. Marcos Jr. imposed a nationwide cap on rice prices to ensure the food staple will remain affordable amid reports of widespread price manipulation and hoarding.
Citing the provision of Republic Act No. 7581 or the Price Act, the Chief Executive issued Executive Order (EO) No. 39 on 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 would be based on the Bureau of Custom’s (BOC) reference price.
Marcos issued EO 39 after the DA and DTI received 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.
Based on the price monitoring of DA in Metro Manila, the retail price for local commercial RMR ranges from P42 to P55, while price for WRM 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) remains 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,” the President 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.
The President ordered the DA and DTI to impose the price ceiling starting 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 on 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 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.
Federation of Free Farmers (FFF) National Manager Raul Q. Montemayor expressed concern over the potential negative impact of EO 39 to rice farmers and traders since it made the prices of the food staple artificially low.
He noted this might 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 could 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 been given an accurate prognosis and recommendations on the appropriate price when he decided to issue EO 39.
“I think at P22-P25 per kilo dry basis [palay], the farmers will be happy. That will mean retail prices of P45 to 50 per kilo,” the FFF head told BusinessMirror in a Facebook message.
Last Tuesday, Marcos assured the government would provide support to farmers and retailers, who will be affected by the “legal tools” they will use to regulate the price of rice.
The BusinessMirror sought DA’s comment on the details about the said support mechanism, but the agency is yet reply as of this writing. EO 39 did not mention any such support mechanism.
The DTI, for its part, assured the public on Friday it will perform its monitoring and enforcement functions in collaboration with DA, PCC and other concerned agencies following the issuance of the EO imposing mandated price ceilings on rice.
“Rice is an essential staple food of Filipinos. In our commitment to making it accessible and affordable, the DTI supports the implementation of Executive Order No. 39 on the Imposition of Mandated Price Ceilings on Rice,” Trade and Industry Secretary Alfredo E. Pascual said in a statement.
Pascual stressed that the price ceiling is aimed at protecting Filipino consumers from “unfair and exploitative” pricing practices. He said that both the Trade department and the “broader Philippine government” are focused on safeguarding lower-income families and vulnerable communities, who are most affected when prices of essential goods surge unexpectedly.
“We recognize the urgency of addressing the escalating rice prices in the market. In parallel, it is imperative to maintain stringent oversight over rice pricing and supply to preclude any potential hoarding and price manipulation by traders and retailers,” Pascual said.
Jayson Cainglet, executive director of agriculture group SINAG lauded President Marcos’ issuance of EO 39, mandating a rice price ceiling, adding “there is no reason for any price increase these past weeks as there was/is no rice shortage in the country.”
He said traders capitalized on the initial public panic created by the statement of the National Food Authority that government buffer stock is only good for 1.5 days.
“…There is no rice shortage to justify any price increase,” he stressed. “Our stocks are good to last until the first quarter of next year. And we have yet to harvest the expected 7 million metric tons of rice this harvest season.” With Andrea E. San Juan