Finance Secretary Benjamin Diokno said over the weekend that the government's economic team will discuss with President Ferdinand Marcos Jr. this week a proposal from farmers and businesses to remove the rice price cap soon.

"There will be a meeting and then an assessment on when to lift the rice price caps," Diokno said in a media briefing.

He said they will update Marcos Jr. on the impact of the price control on rice, which he ordered to be effective starting on 5 September.

"Our role as cabinet secretaries is to give the best advice based on the most recent information," he explained.

Rice prices, he said, should start stabilizing at affordable levels this month as farmers have reported fresh rice supply and the government continues to attract rice importers.

"Harvest season has already started, and the imports are coming," Diokno said.

Rice prices in the domestic market climbed by at least 10 percent to P60 per kilo, forcing Marcos to impose price caps at P41 per kilo for regular rice and P45 per kilo for well-milled rice.

India effect

Economists said the price hikes must be an effect of India's recent export ban on non-white basmati rice, which triggered increased rice prices in other rice-exporting countries like Vietnam and Thailand.

Marcos, however, had been blaming smugglers and hoarders for the price hikes, saying the cartel had been creating artificial shortages to jack up prices.

Leonardo Montemayor, former agriculture chief and board chairman of the Federation of Free Farmers, said rice prices might settle at P46 per kilo once the price caps had been removed.

Marcos recently rejected the economic team's proposal to temporarily lower the rice tariff for members of the Association of Southeast Asian Nations from 35 percent to a range of 0 percent to 10 percent.

The President cited projections by agriculture officials and the economic team that "world rice prices will go down."

Diokno said the Rice Tariffication Law, which took effect in 2019, has helped bring down overall prices of goods in the domestic market since the country's inflation skyrocketed to 9.2 percent in 1998.

The law removes quotas on rice volumes the Philippines can import but imposes high tariff rates for exporters so the government can accumulate funds to mechanize local farms and boost local rice production.

"They collected more than enough. The law requires only P10 billion yearly, but their collection reached P17 billion," Diokno said.

The Rice Tariffication Law is effective until 2025.

Diokno said the rice tariff is "forward-looking," which requires the latest agricultural and economic data so the government can adjust its rate wisely.

Looking at the near future, he said, "revenue loss from a lower rice tariff is not crucial."