Ferdinand Marcos Jr.

Marcos lifts price cap on rice

Dwight de Leon

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Marcos lifts price cap on rice

President Ferdinand Marcos Jr leads the distribution of confiscated smuggled rice to beneficiaries of the Department of Social Welfare and Development's Pantawid Pamilyang Pilipino Program at the San Andres Sports Complex in Manila on September 26, 2023.

Alfred Frias/NIB-PNA

(5th UPDATE) 'As of today, we are lifting the price caps on rice – both for the regular milled rice and for the well-milled rice,' Marcos says

MANILA, Philippines – President Ferdinand Marcos Jr. on Wednesday, October 4, announced the removal of price ceilings on rice, nearly a month after its implementation.

“As of today, we are lifting the price caps on rice – both for the regular milled rice and for the well-milled rice,” he said in an ambush interview after the distribution of confiscated rice to qualified beneficiaries of the government’s conditional cash transfer program in Taguig on Wednesday, October 4.

The announcement came a day after Marcos met with officials from the Department of Agriculture (DA) and the Department of Trade and Industry, which presented a report showing favorable indicators to lift Executive Order No. 39.

Marcos issued the order through Executive Order No. 42 dated October 4. A copy was released to the public a week later.

Marcos ordered the implementation of the price cap on rice starting September 5, in an attempt to stop unscrupulous individuals – such as hoarders and smugglers – from manipulating market prices of rice to as high as P60 per kilo.

This forced retailers to sell rice at around P41 to P45 per kilo, depending on the type.

Adhering to the price cap has been a challenge for rice retailers, who struggled making a profit since logistics costs in the business are already expensive. This prompted the government to give qualified small rice retailers a P15,000-subsidy.

The policy may also have been used by traders as justification to lower the buying prices from farmers, whose backs are already against the wall.

The President’s economic team supported the price cap policy, even though Finance Secretary Benjamin Diokno admitted the release of Executive Order 18 surprised them.

The price ceiling policy also cost Finance Undersecretary Cielo Magno her job. She was asked to resign after she posted a differing view through a photo showing the chart of the law of supply and demand.

In economic theory, a price cap would generate increased demand and decreased supply, resulting in a shortage.

According to the DA’s Bureau of the Plant Industry, 80% to 90% of retailers have been compliant with the price cap since its implementation.

Rice assistance

Marcos lifted the price cap on rice as Filipino consumers continued to reel from high prices of basic goods. A Pulse Asia survey held in September showed that a majority of Filipinos are most dissatisfied with the Marcos administration’s efforts to control inflation.

On Wednesday, Marcos insisted that the rice supply in the country is adequate, and will continue to go up in time for the harvest season.

He promised continued assistance for farmers and poor families. 

“The House of Representatives is crafting a program where 33 congressmen in the National Capital Region will be giving rice assistance in different areas in Metro Manila. That’s another measure we are undertaking,” he said.  

In his speech, the President also named rice retailers which are now the subject of smuggling charges: San Pedro Warehouse, Blue Sakura Agri Grain Corporation, FS Ostia Rice Mill, and Gold Rush Rice Mill.

“We won’t allow unscrupulous individuals destroying our livelihoods and our entire agriculture sector to continue their old ways,” he said. 

Meanwhile, Trade Secretary Alfredo Pascual gave assurances that the government will complete its distribution of P15,000 cash allowances to micro and small rice retailers affected by the price cap.

Department of Trade and Industry-Fair Trade and Enforcement Bureau Director Fhillip Sawali also said that the cash assistance program “won’t be affected” by the lifting of the price cap, since it’s a separate program.

Under the relief program headed by the Department of Social Welfare and Development, about P217 million was released to 14,480 out of the government’s 19,685 target beneficiaries. Sawali noted that 5,738 retailers have yet to receive the P15,000 one-time cash assistance. – Rappler.com

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Dwight de Leon

Dwight de Leon is a multimedia reporter who covers President Ferdinand Marcos Jr., the Malacañang, and the Commission on Elections for Rappler.