Traders have kept their imported rice stocks in warehouses to drive retail prices up despite abundant supply.

WORK continues for this farmer in Sual, Pangasinan despite the continuing dip in the prices of unhusked rice as government tries to address their concern before the holiday season. YUMMIE DINGDING @tribunephl_yumi

While Malacañang on Monday said no directive from the President was given to stop rice importation, the government remains on top of implementing measures to address short-term transition challenges, specifically the drop in unhusked rice prices in some areas in the country.

This is to ensure that consumers will fully reap the benefits of the new rice trading regime.

This was reiterated by Finance Secretary Carlos G. Dominguez III, who said the economic team is fully committed to its goal of alleviating the plight of the country’s rice farmers.

To curb the unprecedented price drop of the staple food, Dominguez said the government is monitoring location-specific prices so that interventions are designed and deployed on an evidence-based and targeted manner.

The measures include both expanded assistance to farmers and intensified enforcement of regulations against abusive trading practices.

Presidential spokesman Salvador Panelo, meanwhile, clarified that President Rodrigo Duterte did not issue a suspension on rice importation as reported by another media outlet.

Duterte was quoted as saying that government must now begin purchasing local rice to assist local farmers amid the Rice Tariffication Law (RTL) that eased the entry of imported rice into the Philippines.

“As of this time, there is no order to stop rice importation,” Panelo said.

President Duterte earlier expressed his support for the passage of the RTL, saying that it is a move for the “greater good” of the agricultural sector in the country.

“It is a move that is intended to serve the greater interest of the majority of the people,” Duterte said.

Finance Undersecretary Karl Kendrick Chua, who heads the DoF’s Strategy, Economics and Results Group (SERG), said the wide discrepancy between the farmgate price and the retail price of regular milled rice in some regions starting in October indicate a problem in the “middle supply chain.”

He was referring to traders who have kept their imported rice stocks in warehouses to drive retail prices up despite abundant supply.

“The palay price is still falling but the retail price is not falling as fast so there’s a growing disconnect,” Chua said.

He said the government is also closely monitoring possible distortions in the market, particularly the widening gap between farm gate prices for palay and rice retail prices in specific provinces.

Both the Bureaus of Internal Revenue (BIR) and Customs (BoC) have formed strike teams to look into possible smuggling and hoarding activities, and non-compliance with tax and business regulations.

Last 3 October, the DoF and BIR raided unregistered warehouses in Bulacan and discovered more than 250,000 sacks of imported rice from Vietnam and Myanmar, among other commodities. To date, the companies involved have not produced import documents.

Meanwhile, DoF Assistant Secretary and spokesman Antonio Lambino II said the department has received reports that some traders reserve warehouse spaces without storing anything in them, “so that they can put pressure on the farmers to sell at very low prices because the farmers now don’t have anywhere to put their harvest.”

The anti-smuggling and anti-hoarding activities are expected to intensify as the DA and the Philippine Competition Commission (PCC) jointly investigate possible collusion in the domestic rice market, alongside enforcement of tax and customs regulations by the DoF, BIR and BoC.

Based on the official data from the Philippine Statistics Authority (PSA), from an average of P17.23 per kilo of dry palay from 2015 to 2017 — when prices were normal, prices declined to an average of P15.71 per kilo from the third week of September to the second week of October this year. This translates to an average loss for farmers of about P1.52 per kilo.

In some provinces, farmgate prices fell by as much as P5.63 per kilo while in others, palay prices rose by P3.75 per kilo.

Provinces with the biggest drop in dry palay price per kilo relative to the normal period were Bulacan (P5.63), Compostela Valley (P5.20), Pampanga (P4.60), Ilocos Norte (P4.38) and Agusan del Norte (P4.37).