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MANILA, Philippines – Justifying his controversial decision to impose a price ceiling on rice, President Ferdinand Marcos Jr. said that the government only stepped in because of market manipulation by “smugglers and hoarders.”
“Sa pag-aaral namin, ang dahilan lamang dito ay talagang nandiyan ang mga smuggler at saka ang mga hoarder (In our studies, the only reason for this is really because of smugglers and hoarders),” Marcos said on Monday, September 4, in a departure speech before leaving the country for the ASEAN Summit in Indonesia.
Without the actions of smugglers and hoarders, Marcos claimed that there was no reason for the price of rice, which has risen by 16.7% since July, to increase as much as it has in recent months.
“Hangga’t maari, ayaw kong pakialaman ang merkado at pabayaan natin. Let the market do its work. Ngunit, ay pinapakialaman na ang merkado natin, kaya’t kailangan pumasok ang pamahalaan (As much as possible, I don’t want to meddle with the market. Let the market do its work. But they’re manipulating our market, so the government has to step in),” he added.
Executive Order No. 39 caps the price of rice at P41 per kilogram (kg) for regular milled rice, and P45 per kg for well-milled rice. Meanwhile, price monitoring data from the Department of Agriculture (DA) shows that the price of rice has already reached as high as P56 per kg for well-milled rice in some markets.
The President, who is concurrent acts agriculture secretary, emphasized that the government will continue to crack down on smugglers and hoarders. Recently, the Bureau of Customs inspected and padlocked several warehouses in Batangas and Bulacan, although the agency has yet to confirm whether these are indeed smuggled goods.
However, not everyone is convinced that price manipulation by malicious actors is the main reason for soaring prices. Raul Montemayor, Federation of Free Farmers Cooperatives national manager, countered the DA’s assumption that rice supply in the country remained robust.
“Sa amin, iba ang basa namin. Sa tingin namin, napakanipis na lang ‘yung naiiwang supply (For us, we read it differently. We think that the supply left is very low),” Montemayor said in a GMA News interview. “I think they are barking at the wrong tree if they point to hoarding and price manipulation. Meron sigurong gumagawa niyan (There may be some who do that), but that is not the cause of the high prices.”
What about affected retailers?
Before leaving for the ASEAN Summit in Jakarta, Indonesia, Marcos presided over a meeting with government agencies to discuss “mitigating measures for rice retailers.”
One of the proposed measures is to provide financial assistance to retailers in wet markets and sari-sari stores, covering the difference between the cost of rice and the imposed price cap.
Other measures mentioned were loan programs, government logistics support for transporting rice, support in linking local rice farmers to retailers, and launching a “Kadiwa-Diskwento Caravan” that will buy rice at prices above the ceiling and resell them to consumers at a lower price.
The Department of Social Welfare and Development (DSWD) also has a livelihood assistance program for small-scale rice retailers.
The President also said in his departure speech that the price cap is only a temporary measure which could soon be lifted once rice imports arrive and the harvest season begins.
“This is a temporary measure. The rice supply will be coming in the second week of September. Nandiyan na ‘yung ani ng Pilipinas. Nandiyan na po ‘yung importation natin. Wala na naman talagang magiging dahilan kung makit tataas ang presyo ng bigas (The country’s harvest and importation will be there. There won’t be any reason for the price of rice to still be high),” he said.
Marcos famously promised to bring rice down to P20 per kilo during his election campaign, a move that he has so far failed to achieve or even come close to.
DSWD to disburse aid for retailers
DSWD Secretary Rex Gatchalian said that the government will use a portion of its Sustainable Livelihood Program fund to support retailers affected by the price cap.
The Department of Trade and Industry and Department of Agriculture will work together to compile a list of affected retailers, which will be given to the DSWD for the agency to use in disbursing assistance.
“‘Yung halaga ng grant will be commensurate doon sa maaring maging epekto nito doon sa mga small retailers natin. At patuloy ‘yan kinocompute ng DTI pati na din ng Department of Agriculture para masiguro natin na angkop at tama ‘yung halaga na itutulong natin,” Gatchalian said in a chance interview following President Marcos’ departure for Indonesia.
(The amount of the grant will be commensurate with the effect to the small retailers. The DTI and Department of Agriculture will continually compute and ensure that what we’re giving is enough.)
Gatchalian also said that Marcos’ “marching order” for DSWD is to make the payout to affected rice retailers as quick as possible. (READ: Marcos blames smugglers, hoarders as sole reason for high rice prices)
“Tatawag na ako sa DTI at kukulitin na natin sila kaagad na makuha ko ‘yung listahan at ‘yung parameters para agad-agad,” the DSWD Secretary said. “May special disbursements officer naman kami nationwide, at iyon ‘yung gagamitin natin para makapayout kaagad tayo.”
(I’ll call up DTI and follow-up the list and parameters so we can start at once. We have special disbursement officers nationwide, and we’ll use them so we can do the payouts right away.)
The DSWD has P6 billion for the program under the 2023 national budget, although much of it had been disbursed earlier in the year. In the past, funds under the Sustainable Livelihood Program were used to help those affected during the Boracay clean-up ordered by then-president Rodrigo Duterte and to provide financial assistance during the pandemic.
Will the price ceiling work?
The decision to set price ceilings on rice has provoked divided reactions. On the government’s side, the National Economic and Development Authority (NEDA) justified Marcos’ EO, saying that it would help as the country is “facing difficult times” caused by extreme weather events that have hit the agricultural sector.
“The imposition of a price ceiling on rice will address this issue in two ways: (1) it will immediately reduce the price of rice, and (2) it penalizes and consequently discourages hoarding, further decreasing the price of rice,” NEDA said in a statement.
However, economists worry that attempts to cap the price of rice will do more harm than good. The Foundation for Economic Freedom (FEF) said that EO 39 will “harm Filipino consumers and farmers” since it could reduce the supply of rice and encourage black market operations. (READ: Price cap on rice buys little time to solve ‘cancerous’ supply woe, says national scientist)
“The price cap will harm the entire economy because it will not be effective in solving the demand-supply gap and arrest increasing food price inflation,” FEF said in a statement on September 3. “It will only aggravate the current tight rice supply situation into a full-blown rice crisis.”