PCC to know why rice prices are rising when shortage is ‘fake news’

Agriculture Secretary Emmanuel F. Piñol has insisted the reports on rice shortage are nothing but “fake news.” But Trade Secretary Ramon M. Lopez admitted there has been an increase in the prices of rice the past weeks, at the time the National Food Authority announced its stockpile is nearing depletion.

These statements—showing prices increased under the context of a fake shortage—made the Philippine Competition Commission (PCC) eager than ever to find out if anticompetitive practices are really rampant in the rice industry.

In an interview with the BusinessMirror, PCC Commissioner Johannes R. Bernabe said conducting a preliminary investigation on rice traders is an option should the issues paper on the industry point to possible violations of the competition law. However, he also said the more logical thing to do is to launch a market study first to be able to acquire firsthand information from the ground.

“We can launch a preliminary investigation, or—if the issues paper is not sufficiently fleshed out insofar as anticompetition is concerned—we can commission a proper market study [that] focuses on the indicated anticompetitive situations,” the PCC official said.

Under a preliminary investigation Bernabe explained that the regulator will be looking for possible violations already. As for a market study, he said, it can be compared to a field report wherein competition experts will conduct research and interviews to get a grip of the entire trading system and where anticompetitive practices might take place in that process. “[If] market study, that is like a follow-through on the issues paper. That is a more in-depth look [where] we will be starting to talk to individual firms or entities [that] are in the sector, like the traders.”

He pointed out that investigating the rice industry is more than ever crucial, with the recent reported shortage on the staple that caused prices to increase. Piñol called the shortage as nothing but fake news allegedly operated by several traders.

But Lopez, citing the trade department’s price monitoring, said regular-milled rice was at P40 per kilogram in February, compared to P37 during the same month last year. Year-on-year, well-milled rice is priced at P42 per kilogram against P40, while premium rice is at P46 against P45.

This reported shortage and sudden increase in the prices are just two of the many reasons Bernabe cited for the PCC to conduct an in-depth look into rice trading in the country. “For the PCC, our concern is [if] there are sufficient information or basis to look into possible anticompetitive agreements—so that would be collusion and cartel-like behavior—in the industry,” he said.

“That is something that, hopefully, the issues paper can bore some inputs on so that it can take us to an appropriate course of action, whether to conduct a full-blown market study preparatory to a preliminary investigation. Right now, we don’t know yet,” he added. In spite of what he called a “delicate situation,” Bernabe hopes the PCC will be able to get the necessary information to do a preliminary investigation on the rice industry.

Either way, the PCC official vowed it will throw in all the needed work to uncover possible anticompetitive practices—may that be cartels or collusions—in the industry providing the staple of the population. “Well, we are always perceived to be stepping on the toes of some business entities [and] does not have to be in the rice sector,” he said.

“Right now, in the rice sector, we are still off the radar. However, once we identify the anticompetitive practices, it becomes a real issue,” Bernabe said.

Rice is just one of the nine sectors the PCC is currently investigating for behaviors that might be harming consumer welfare. Other sectors under probe by the regulator are meat and poultry, pharmaceutics, land transportation, air transportation, agricultural credit, digital commerce, retail and telecommunications.




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Turning Points 2018