Cabinet advises Marcos to lift price cap on rice

By Kyle Aristophere T. Atienza, Reporter

AGRICULTURE and Trade officials have recommended the lifting of the price cap on rice as prices have dropped and local supply has improved, according to Bureau of Plant Industry (BPI) Director Gerald Glenn F. Panganiban.

“Indicators point that there are decreasing prices of rice observed in the market since our implementation [of the price cap order] last month,” Mr. Panganiban said after the Trade and Agriculture departments’ meeting with President Ferdinand R. Marcos, Jr. on Tuesday.

The price ceiling, which took effect on Sept. 5, limits the price to P41 a kilo for regular milled rice and P45 for well-milled rice.

“From our parameters, it looks ready (to be lifted),” he said in mixed English and Filipino, citing the drop in global rice prices and improving supply. “But of course, it’s all upon the President to decide on it.”

Mr. Panganiban noted there would be stable rice supply in the fourth quarter, as the country harvests 1.9 million metric tons of rice within the month. He estimated that rice supply by end-October would be equivalent to 74 days from 52 days as of end-September.

“We are expecting more bumper harvest for the coming October and November. The public can expect that we will have a stable supply of our main staple,” he said.

When asked what was preventing the administration from immediately lifting the price cap on rice, Mr. Panganiban said: “All of the decisions that should be made should be with the complete staff work. We are just verifying so that we can make sure that when a decision arrives, everyone will benefit from it.”

Economists have been urging the President to lower rice tariffs or consider other strategies instead of imposing price controls, which they said would limit the supply of the food staple and lead to black market trading.

Price caps may also discourage traders from buying rice from local farmers, who will be forced to lower farmgate prices.

Mr. Marcos has been saying that the country has enough rice supply, blaming economic saboteurs — hoarders and smugglers alike — for the commodity’s spiraling prices.

Late last month, he rejected his economic managers’ proposal to lower tariffs for rice to as low as 0% from 35%.

“Hoarders and smugglers will not be able to manipulate the prices if the supply is adequate,” said Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University.

“Once farmers are able to deliver their goods directly to the market without going through these hoarders and smugglers, then the latter would have lost their market power,” he said in a Facebook Messenger chat.

During the 2022 presidential campaign, Mr. Marcos vowed to bring the price of rice to P20 a kilo.

But more than a year later, prices of the national staple have surged due to various factors, including India’s ban on exports of non-basmati white rice. In August alone, rice inflation quickened to 8.7% from 4.2% a month earlier.

“The timing of today’s conference is a knee-jerk reaction in response to the low survey received by President Marcos,” Gary Ador Dionisio, dean of the De La Salle – College of Saint Benilde School of Diplomacy and Governance, said via Messenger chat. 

Mr. Marcos’ approval ratings fell by double digits across all areas and socioeconomic classes, according to a Pulse Asia Research, Inc. survey conducted from Sept. 10 to 14, with economists attributing the decline to the rising prices of basic commodities like rice.

The remarks of BPI’s Mr. Panganiban caused more confusion than clarification, Mr. Dionisio said, noting that there is “no harmony of interest and message” between the Agriculture department and the Palace.

“This is not a clear policy but a political firefighting.”

The price cap order has prompted the departure of a Finance official who has warned that the move would only empower hoarders.

“It’s about time [to lift the price cap],” former Finance Undersecretary Cielo D. Magno said via Messenger chat, reacting to Mr. Panganiban’s remarks. “The price cap does not address hoarding and smuggling. It actually encourages hoarding and smuggling. The price cap makes matters worse.”

The President and his economic managers have said the price cap order is just temporary.