President Ferdinand Marcos Jr. lifted the temporary price ceiling on rice Wednesday, four weeks after capping the cost of the staple to support poor households.
On Sept. 5, Mr. Marcos set the maximum retail price per kilo of regular milled rice at P41 and for the higher-quality well-milled rice at P45.
“As of today, we are lifting the price caps on rice, both for the regular milled rice and for the well-milled rice,” Marcos said at an event in Taguig City, where a thousand sacks of smuggled rice seized in a raid were distributed to poor families.
The President, who also sits as Agriculture chief, said it was the “appropriate time” to remove the cap since the government was “giving away rice.”
“So, we are removing the controls but it doesn’t mean that we will just leave it like that because we still need to fix the agricultural sector. We still need to help the poorest and the hungriest so that they can somehow rise above their situation,” he said.
The price cap on rice was criticized by some economists, who warned it could distort the market and lead to shortages.
Rice is a staple in the country of 110 million people, but the Philippines cannot produce enough and is one of the world’s top importers of the grain.
Two farmer groups lauded the lifting of the rice price cap, which they said was timely given the ongoing harvest season.
“(The President’s) recent decision to lift the price ceilings on rice will provide another boost to farmers. It will stabilize palay prices during the ongoing harvest season and provide incentives for farmers to expand their production and reduce our reliance on imports,” the Federation of Free Farmers (FFF) said.
“As fresh harvests enter the market, we also expect retail prices of rice to go down without the need for price caps,” it added.
FFF, however, underscored the need for the government to pursue its campaign against smugglers and price manipulators whose illegal activities depress farmgate prices even as they keep retail prices high for consumers.
Jayson Cainglet, executive director of Samahang Industriya ng Agrikultura (SINAG), added: “The lifting of the price cap has been supported by the agriculture sector [because] there was/is no rice shortage. The increase in rice prices was because of hoarding, profiteering and smuggling.”
For his part, Trade Secretary Alfredo Pascual said the distribution of the P15,000 cash aid to micro and small rice retailers will continue until all the funds allocated for the program are utilized despite the lifting of the price cap.
Data from the Department of Social Welfare and Development (DSWD) showed P217.2 million has been released to 14,480 out of the targeted 19,685 micro and small rice retailers nationwide as of September 29, 2023.
In the National Capital Region, while 2,397 retailers have already received the flat rate payout of P15,000, there are still 5,378 remaining listed beneficiaries who are set for payout as of October 2.
The DTI said the recommendation to lift the mandated price ceilings on rice was based on the market retail price, stable supply of stocks and favorable external factors.
The agency said the average selling price are close to the price caps, while average farmgate price is maintained at P14 to P23 per kilogram.
Senate President Juan Miguel Zubiri called on the President to crack the whip on agencies that are supposed to track down rice hoarders.
“Why haven’t we punished price manipulators?” Zurbano said.
Senator Risa Hontiveros added that charges should be filed against those involved in the spike of rice prices.
“The claim that cartels, hoarders, and price manipulators were responsible but thwarted by the price cap remains unproven, even months after the President ordered an investigation,” she said, adding that the padlocking of rice warehouses will just be a “show of dramatic action” unless charges are filed.
The administration has been struggling to rein in consumer prices, with the year-on-year inflation rate hitting 5.3 percent in August, up from 4.7 percent in July.
Mr. Marcos has insisted supply is not a problem and instead blamed hoarders and opportunistic traders for high prices, as well as a ban on rice exports by major producer India and the war in Ukraine.