DA rules out rice price caps

Farmers and producers can look forward to increased rice production without the constraint of price caps, potentially leading to higher yields and improved food security.

This after the Department of Agriculture (DA) assured that it does not plan to impose a price cap or suggested retail price (SRP) on rice because it might have negative effects in the future.

Assistant Secretary Arnel de Mesa, DA spokesperson, in a form Saturday, said the agency’s priority is rice supply, and imposing a price ceiling or SRP is not an option.

“At present, we are not talking about that (SRP). Secretary (Francisco Tiu Laurel Jr.) already announced that. We are focusing right now on our supply,” De Mesa said.

Even though President Ferdinand Marcos Jr. issued Executive Order 39 in September 2023 mandating a price cap of P41 per kilo of regular milled rice and P45 per kilo of well-milled rice, rice inflation still quickened in September 2023 to 17.9 percent and continued its upward trend. This prompted the President to lift his order on 4 October.

De Mesa said that rice inflation accelerated to 24.4 percent this year, its fastest increase in 15 years since February 2009, when it was 24.6 percent.

The Philippine Statistics Authority (PSA), on the other hand, said rice inflation would “increase strongly” until July, citing a low base effect, particularly the low rice inflation registered from January to July 2023.

De Mesa echoed the PSA’s projection that rice inflation will continue upward until July but will normalize in August.

Despite the double-digit, year-on-year price inflation, De Mesa said retail prices of rice were declining month-on-month.

“Rice prices dropped from P52 (per kilo) last month to the current P50 to P49,” De Mesa said.

He said the President’s campaign promise to bring down the retail price of rice to P20 per kilo remains the DA’s “aspiration and goal.”

“Although we are unable to reach the goal at this time, our plans and activities are geared towards reducing the cost of production and for us to be competitive in the future,” he said.

“If our neighboring countries can bring down the cost of production, we will do it too,” he added.

Inflation seen to slow in August

Meanwhile, PSA chief Dennis Claire Mapa said the rice inflation rate accelerated to 24.4 percent in March, faster than the 23.7 percent logged in February.

Mapa noted that the continued high double-digit increase in rice inflation was due to a low base effect seen in January to July last year when inflation for agricultural produce was relatively low.

“Our expectation is it will increase strongly until July because of [low] base effect unless there is an intervention that will happen in the market that will bring down prices,” he said in a press conference over the weekend.

“We expect that in August, it will gradually slow down,” he added.