We’re drifting farther and farther away from President Ferdinand Marcos Jr.’s campaign promise of bringing rice prices to P20 per kilogram.

Latest data as of July 2023 show that the average prices of well-milled and regular-milled rice have already reached four-year highs: P45.52 and P41.53 per kilogram, respectively (Figure 1).

The average price of special rice (including dinorado and jasmine) is also nearly at a four-year high, at P54.62 per kilogram.

Needless to say, these prices are more than twice (or nearly thrice) what the President had promised Filipinos – a promise that captivated many voters in the 2022 polls.

Figure 1.

It’s only now that Marcos’ economic managers are admitting that the President’s goal (what he later called an “aspiration”) is really a moonshot.

Socioeconomic Planning Secretary Arsenio Balisacan said recently in a Palace press conference that lowering the price of rice to P20/kg “cannot be done overnight,” and “that’s asking for the moon.”

Key to lowering rice prices, according to him, would be to increase agricultural productivity. He’s right of course. But that’s easier said than done.

For one thing, we have an inherent disadvantage in rice production compared to our ASEAN neighbors.

If you look at the map below (Figure 2), we simply don’t have enough land area devoted to growing rice compared to, say, India, Thailand, Vietnam, Myanmar, or Cambodia. No surprise that these neighbors are some of the world’s top rice net exporters in 2022: India was first on the list, Thailand second, Vietnam third, Myanmar fifth, Cambodia eighth.

Relative to our continental Asian neighbors, we’re hammered by typhoons a lot more. And we don’t have huge rivers and deltas to irrigate our farmlands naturally. Vietnam, for instance, supplies 13.5% of global rice exports, and 90% of that comes from the Mekong Delta.

Geography, in short, has long been (and continues to be) a major constraint to rice production in the Philippines.

Figure 2. Source: Nelson (2016).

Other factors beyond geography are also at play. Farmers can only produce so much rice in small farms they got from the incomplete land reform program. Rampant land conversion (think real estate developments and new subdivisions left and right) also diminishes what little rice-growing areas we have.

Irrigation remains woefully inadequate. In a recent Senate budget hearing, Senator Raffy Tulfo mentioned that “only 65.28% of the 3,128,000 hectares of total irrigational areas in the Philippines are irrigated…”

The dwindling ranks of rice farmers also pose a concern, with fewer youth interested in pursuing rice farming. This, per se, wouldn’t be a problem if we invested more in machines and other equipment to make the remaining farmers more productive. But we’re not investing enough in this area.

We could also be investing a lot more in research and development into, say, sturdier rice varieties that can withstand climate change. But we’re lacking here, too.

No wonder we keep importing rice to satisfy our swelling needs. In 2022, the Philippines emerged as the world’s second-largest rice net importer, next only to China (although there are vast expanses of rice paddies in China, they also have more than 1.4 billion people to feed).

No luck

Rather unluckily for Marcos, new global developments will push domestic rice prices even higher in coming months.

The world’s top rice exporter, India, accounting for almost 40% of rice exports in 2022, recently banned its exports of non-basmati rice. (Last year, India already banned its exports of broken rice.)

This policy is due to high domestic inflation and the upcoming spell of El Niño. Understandably, they’re looking to secure their own rice stocks first before selling abroad.

Because of lower world supply, world rice prices have shot up. In fact, the rice price index of the Food and Agriculture Organization (FAO) of the United Nations is now nearly at a 12-year high (Figure 3).

Figure 3. Source: FAO.

Sure, our next rice harvest season is upcoming. But you can still expect rice prices here in the Philippines to skyrocket if, for example, other top rice producers (like Thailand and Vietnam) restrict their exports to ensure their domestic supplies.

The upcoming spell of El Niño can also wipe out our own rice production if there will be severe droughts. Rice is particularly vulnerable to El Niño: a study found that “Rice…had the highest probability of simultaneous loss during the El Niño phase…”

Another problem is that, as of 2018, food occupied nearly 35% of the average Filipino household’s budget, and a fourth of that was accounted for by just rice (almost 9% of the total budget).

Simply put, rice has an outsize share in the typical Filipino’s budget. So huge spikes in rice prices can spell the difference between poverty and plenty for many Filipinos.

No plan

Perhaps the most deplorable fact in all this is that the Marcos government essentially made no plans about reducing rice prices to the promise of P20 per kilo.

Agriculture Undersecretary Domingo Panganiban, facing lawmakers in a budget hearing, said: “To be honest we never discussed about those things you are asking…with the President.”

Quite embarrassing, since Marcos himself is (still) the self-appointed agriculture secretary – a post that he still refuses to let go of.

Sadder still is the revelation by the same undersecretary that Marcos has never convened all agriculture undersecretaries in at least the past six months.

Instead, said Panganiban, he’s become the relay person: “The issues and concerns that the President tell me are the concerns that I’m telling the undersecretaries, assistant secretaries and for that matter, even the directors.”

Lack of coordination coming from Marcos himself is leading to downright conflicting statements from his subordinates.

For instance, while Department of Agriculture officials say P20 per kilo is not really feasible in, say, the next two years, Secretary Balisacan clings to the idea it’s doable if rice productivity increases (a really big if).

Meanwhile, for his part, Trade Secretary Alfredo Pascual said that “our diet is very traditional” and we need to “adapt and adjust” our diet (away from rice and toward sweet potato and white corn). Also easier said than done.

No action

So what is Marcos doing, if anything?

On July 29, he actually saw the problem already, and feared that we will have to import a lot of rice. He said, “Indonesia is importing, Vietnam has closed. India has closed. But I think I can make a deal with India… But we have to start importing already.”

Importing is okay as a stopgap measure. But maybe the importation of buffer rice stocks (through the National Food Authority?) should have been done much, much earlier, since even last year there were already indications of a looming rice shortage.

In other words, maybe don’t start importing now, when rice-exporting countries are already beginning to restrict their supplies.

Meanwhile, in mid-August, the Palace came out with a statement titled “RICE SUPPLY IS SUFFICIENT” (all caps theirs).

In it, the Palace said, “The government is working with the private sector to rationalize the prices and make available affordable rice in the market and in Kadiwa” (special outlet stores selling cheap foodstuffs, first introduced during Marcos Sr.’s Martial Law).

However, we can’t address the nationwide problem by simply multiplying Kadiwa stores. It’s not accessible to most Filipinos, unless there are hundreds of thousands of these stores nationwide – in which case it might be unsustainable amid growing deficits and debt.

Marcos also issued anew a warning against rice “hoarders and price manipulators who take advantage of the lean months before harvest season.”

However, this has proven to be nothing more than an opportunity for certain politicians (including House Speaker Martin Romualdez, the President’s cousin) to embark on “raids” where they can have photo ops and appear like they’re personally persecuting hoarders. These raids don’t really address the root problem of higher prices.

Lastly, the President recently said, “We are closely monitoring the rice supply and the rising prices of rice.”

What? Isn’t that the bare minimum of what the government should be doing? This is not the flex that they think it is.

Marcos needs to get rice right. Runaway rice prices will almost certainly lead to more poverty. Marcos himself is at risk, too: his most memorable, tangible campaign promise will blow up in his face – if it hasn’t already. – Rappler.com

JC Punongbayan, PhD is an assistant professor at the UP School of Economics and the author of False Nostalgia: The Marcos “Golden Age” Myths and How to Debunk Them. JC’s views are independent of his affiliations. Follow him on Twitter (@jcpunongbayan) and Usapang Econ Podcast.