MANILA, Philippines – President Ferdinand Marcos Jr. has imposed price ceilings on rice nationwide, amid what Malacañang described as the “alarming increase in the retail price” of the national staple which has surpassed P60 per kilogram for certain types of rice.

Under Executive Order No. 39 dated August 31, Marcos, who is concurrent Department of Agriculture secretary, approved the joint recommendation of the DA and the Department of Trade of Industry (DTI) to set the price ceilings at P41 per kilo for regular milled rice, and P45 per kilo for well-milled rice.

There is no ceiling currently in place for special and premium rice.

Malacañang said late Friday night, September 1, that the price caps will take effect on Tuesday, September 5.

Under EO 39, the price ceiling will remain in place until lifted by Marcos.

Marcos told reporters on Friday, that he expects the Department of the Interior and Local Government, DA, DTI, and the Department of Justice to “make sure the prices stay within the limits that we have prescribed.”

“The real problem is in NCR. It’s not so bad outside of Metro Manila. That’s why maybe we will be focusing our efforts in Metro Manila,” he said.

Based on the August 28 price monitoring data from the DA, local regular milled rice currently sells for P42 to P55 per kilo, while imported regular milled rice sells for P43. Well-milled rice prices range from P47 to P56 for local rice, and P52 for imported rice.

Local markets in Metro Manila, however, sell rice as high as more than P60 per kilo.

This means – based on the prices monitored by the DA monitored – that even the cheapest local regular milled rice has gone up by 16.7% since Marcos said during his second State of the Nation Address that his could lower the price of rice, meat, fish, and other goods.

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. (READ: Kitchen crisis: How some food prices soared under Marcos)

What’s causing the price surge?

The DA and DTI have both reported that the country’s rice supplies are at a “stable level and are sufficient” given the arrival of rice imports and the surplus in local rice production. 

However, the executive order signed by Marcos pinned the blame on the “widespread practice of alleged illegal price manipulation, such as hoarding by opportunistic traders and collusion among industry cartels in light of the lean season.”

Earlier in August, Marcos insisted that rice supply was sufficient and that he would “go after hoarders and price manipulators” causing the surge. On August 24, the Bureau of Customs (BOC) inspected several warehouses suspected of hoarding 202,000 sacks of smuggled imported rice. It conducted another round of surprise inspections on August 30, this time finding P519 million worth of allegedly smuggled rice.

The BOC, however, clarified that it has yet to confirm whether these are indeed smuggled goods. Although the warehouses have been padlocked, the rice may still be released if its owners can provide proof of compliance with customs laws.

“Right now, it’s under verification. We’re also going to coordinate with the Department of Trade and Industry regarding on the issue of hoarding. Sa ngayon po, chinecheck pa po namin kung meron pong kaukulang pagbabayad ng buwis at pati po ‘yung mga kaukulang papeles (Right now, we’re checking if they failed to comply with taxes and also the required paperwork),” BOC spokesperson Jet Maronilla said in a Radyo5 interview on Tuesday, August 31.

The DA and DTI also pointed to factors beyond the Philippines affecting the price of rice, such as the Russia-Ukraine crisis, India’s ban on rice exportation, and volatile global oil prices.

Will it work?

According to the DTI, the price ceilings were computed based on the average rice prices for the last three months – May, June, and July – and confirmed using cost analysis.

Meanwhile, Bureau of Plant Industry Director Gerald Glenn Panganiban said that the DA monitored prices using agribusinesses, marketing assistance services, and regional field offices. And in the event that prices must move in reaction to agricultural damages coming from typhoons, Panganiban explained that the price ceiling could be lifted.

“Ang ating mga price control mechanisms naman po, gaya ng ating price ceiling, ay dynamic, nag-a-adapt siya sa change (Our price control mechanisms, like the price ceiling, are dynamic and adapts to change),” he said in a GMA News interview on Friday.

However, not everyone is convinced that the price surge has been caused solely by hoarding and price manipulation. Raul Montemayor, Federation of Free Farmers Cooperatives national manager, questioned 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 the 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.”

Given the current situation, Montemayor said that farmers most likely sell palay – unprocessed rice – at about P20 to P23 per kg. By the time the rice is processed, retailers would need to sell it at about P45 to P46 to cover costs. 

If the government pushes through with its plan and starts apprehending those selling above the ceiling, it’s possible that retailers may rebrand their well-milled rice as special or premium rice to get around price restrictions. Montemayor also said some vendors might just stop selling rice altogether to avoid selling at a loss.

“Kung ipipilit iyan ng gobyerno, baka mawalan pa ng bigas sa palengke dahil kung masyadong mababa ‘yan at malulugi ang mga retailer sa presyong ganyan ay wala hong magbebenta,” he said.

(If the government forces it, then rice might not be available in the markets because if the price is too low and retailers will be selling at a loss, then no one will sell rice.)  

The Office of the Executive Secretary said in a statement on Friday that inquiries or complaints in relation to EO 39 can be coursed through the government’s 8888 Citizens’ Complaint Center. – Rappler.com