Marcos imposes rice price cap of P41/P45

President Ferdinand Marcos Jr. has imposed a price cap on rice amid what the Palace described Thursday as supply chain challenges and widespread hoarding to effect an artificial shortage.

Mr. Marcos' Executive Order 39, signed by Executive Secretary Lucas Bersamin, set a mandatory price ceiling of P41 per kilo for regularly milled rice and P45 per kilo for well-milled rice.

With the order released yesterday, Malacañang said the President seeks to ease "the considerable economic strain on Filipinos, particularly the underprivileged and marginalized," arising from the spiking inflation.

In justifying the price cap, the EO cited reports from the Department of Agriculture and Department of Trade and Industry that members of a rice cartel have been actively engaged in hoarding and price manipulation.

These illegal activities, coupled with global supply issues like the Russia-Ukraine conflict and the oil price swings, have contributed to the rising rice prices, it added.

Nonetheless, the EO said the arrival of imported rice and the expected local production surplus are seen to stabilize the rice supply.

Marcos, who concurrently heads the DA, last week inspected several rice storage facilities and ordered the Bureau of Customs and other agencies to raid warehouses storing hoarded rice. He also ordered the Philippine Competition Commission to take action against the cartels.

Likewise, he ordered penalties for merchants who leverage their dominant market position or who collude with one another to mark up rice prices.

Rice price increased

The National Economic and Development Authority said the price of rice in the Philippines increased by 1 percent from January 2022 to 4.2 percent in July 2023. Early in his administration, Marcos said his aspiration was to bring down the price of rice to P20 per kilo.

The DA last month projected the supply of rice for the second semester would hit 10.15 million metric tons (MMT), of which 2.53 MMT is ending stock from the first semester. Of the volume, 7.20 MMT is the expected output from domestic production, with 0.41 MMT representing imported rice.

The overall supply would result in an ending stock of 2.39 MMT which would be good for 64 days, more than enough to meet the present demand of 7.76 MMT, the DA said.

The price cap shall remain in force until lifted by the President upon the recommendation of the Price Coordinating Council and the agriculture and trade departments.

The DA and the DTI will lead in the implementation of EO 39 by doing price checks in wet markets and supermarkets.

"The EO primarily mandates the DTI and the DA to strictly implement the price ceilings. We will visit major wet markets and retail stores in the coming days," DTI Secretary Alfredo Pascual told reporters.

"This is not the sole responsibility of the DTI and DA because it's a whole of government approach to ensure that rice in the markets is reasonably priced and remains a conveniently accessible staple food to Filipinos," Pascual added.

The DTI chief pointed out during the Laging Handa Public Briefing yesterday that the EO is not mainly on the retail price of rice but also its supply.

Not a price freeze

"There is no price freeze but a price cap, to be clear. Traders can still lower their prices. This EO is being implemented to prevent price manipulation in the market. Despite the ample supply, prices of rice surged in the past few days," Pascual said.

He maintained the price cap does not apply to other varieties of rice and is only meant for regular-milled rice and well-milled rice.

"We have premium varieties that are not covered by the price cap. During our rounds, we will ensure that the subjects of EO 39 are not mislabeled as premium," he added.

Under the Price Act, retailers violating the price ceiling face imprisonment of from one to 10 years and/or fines of P5,000 to P1 million.

Price manipulators and hoarders, on the other hand, face prison sentences from five to 15 years and fines of from P5,000 to P2 million.

In a media interview in Palawan yesterday, where he opened the celebration of National Peace Consciousness Month, Marcos said the DA and DTI will be joined by the Department of Justice and Department of the Interior and Local Government in enforcing the price ceiling.

"We have put together a structure for the continuing monitoring," the President said. "These agencies already have regular inspections when it comes to other issues, so they will now apply the price ceilings that I have ordered in the EO that I signed on Thursday."

Focus on Metro

Marcos said the government will focus on Metro Manila, where the problem of rising rice prices is most acute. However, he urged the public to report retailers who are selling rice above the price ceiling to the police, the DA, the DTI, or their local government.

"If you find someone selling rice above the price ceiling, please report it," he said. "We need your help to ensure that everyone has access to affordable rice."

The price ceiling on rice was set in response to the recent surge in rice prices. As of 28 August, the average price of regular milled rice in Metro Manila was P42 per kilo, while the average price of well-milled rice was P48 per kilo.