THE economic team of the Marcos Jr. administration is throwing its “full support” behind the state’s mandated price ceiling on rice, even if the measure was not subjected to their scrutiny prior to imposition.
In two separate statements, the Department of Finance (DOF) and the Department of Budget and Management (DBM) emphasized that they are in “favor” of the price ceiling on rice to address the surge in local prices.
Finance Secretary Benjamin E. Diokno described the price ceiling measure as an “essential stop-gap measure” to address the rise in domestic rice prices.
“We agree with the President that implementing a price cap on rice is the most prudent course of action at the moment to achieve two critical objectives: stabilizing rice prices and extending immediate support to our fellow countrymen,” Diokno said on Monday.
Budget Secretary Amenah F. Pangandaman concurred with Diokno, adding that the present market conditions “warrant a special mitigating measure” like price ceiling.
“In an ideal scenario, we can let the market dictate prices. However, as Neda [National Economic and Development Authority] noted, we are now faced with extraordinary factors that we have to consider,” Pangandaman said on Monday.
Economic team blindsided
The statements were issued a few days after Diokno revealed that the economic team was not consulted about the imposition of the rice price ceiling.
Diokno said the economic team was taken aback when President Marcos Jr. issued Executive Order 39 imposing a price ceiling on regular-milled and well-milled rice sold in the domestic market.
At the time that Marcos issued the EO, Diokno together with Pangandaman and Socioeconomic Planning Secretary Arsenio M. Balisacan were in Tokyo, Japan for the 14th Philippines-Japan High-Level Joint Committee Meeting on Infrastructure Development and Economic Cooperation.
However, the power of the President to impose a mandated price ceiling does not require any prior consultation with his economic team.
Under the Price Act, the President can implement the measure upon the recommendation of an implementing agency of the law or the Price Coordinating Council.
The implementing agencies of the Price Act are the Department of Agriculture (DA), concurrently headed by Marcos himself, and the Department of Trade and Industry (DTI).
Under EO 39, Marcos explained that the imposition of price ceiling was a joint recommendation by the DA and the DTI.
Nonetheless, Diokno maintained that a price on rice could be “proven effective” in the “near term” but should not last for an “extended period.” He earlier disclosed that he foresees the price ceiling being lifted after a month of implementation since local rice farmers have started harvesting their crops.
“The imposition of a price cap on rice is geared at addressing non-competitive practices by some market players and discourages hoarding, thereby reducing the price of rice,” Diokno said.
“We understand and fully support the decision of the President because there really are market players who have been misbehaving. Unfortunately, there really are hoarders and speculators. We needed to act fast to effectively address this problem with a tit-for-tat strategy against unscrupulous traders, at least in the near-term,” Pangandaman said.
The Neda earlier pointed out that the price ceiling on rice would give Filipinos a much-needed reprieve in terms of high inflation as well as discourage hoarding. (Related story: https://businessmirror.com.ph/2023/09/04/neda-rice-price-cap-temporary-necessary/)
