Lawmakers are blaming a “collusion” between unscrupulous rice importers and traders as the main factor driving the persistent high prices of rice, despite reports of an oversupply and reduced import tariffs.

At the second hearing of the House Quinta Committee on Tuesday, Marikina Rep. Stella Quimbo argued there was no reason the cost of rice should not go down, citing a report from the Philippine Statistics Authority (PSA) indicating that there was an excess supply of rice.

Data from the PSA showed the rice demand-supply ratio in 2023, pegged at 82.5, plunged to 69.4 at present, clearly indicating an oversupply.

“More importantly, let’s look at the rice stocks. Rice stocks are too high. You even said that it’s a record high. So this means that rice traders really need to release the rice stocks from the warehouses for the price to drop,” Quimbo pointed out.

“We saw in the presentation of the PSA it is very clear that there is a collusion,” the economist-lawmaker added.

Records of the National Economic and Development Authority (NEDA) showed the rice supply from July to October this year was “sufficient” with the total reaching over 5.4 million metric tons (MT), down by 10.1 percent from the second quarter.

It showed that retail prices of regular milled rice in October recorded a 1.7-percent decrease with the price at P50.22 per kilo from P51.07 per kilo in June. Farmgate prices of palay likewise fell from P24.65 to P20.51 per kilo in the same period.

NEDA-Agriculture, Natural Resources, and Environment staff director Nieva Natural said that in the international market, the price of rice (five-percent broken) from top import sources, mainly Vietnam and Thailand, continued to decline from June to October.

Lawmakers argued that with the excess supply of rice along with the enforcement in July of Executive Order 62, which reduced the tariff on rice imports from 35 percent to 15 percent, the markets should be flooded with rice stocks which should lead to a price drop.

According to Natural, the average landed cost of imported rice has significantly declined following the reduction in the tariff rate.

Citing data from the Bureau of Customs, she said the average landed cost of imported rice (five-percent broken) from Vietnam dropped to P33.95 in October from P41.32 in June.

The cost of rice in Thailand also saw a 17.3-percent decline to 33.96 from P41.08 in the same period.

Committee chair Joey Salceda, an economist, said the price of rice in the country should stabilize at around P35 per kilo or a 15-percent reduction from its current cost.

Agap Rep. Nicanor Briones was one with Quimbo in surmising that the persistently high price of the staple was artificial.

He identified two major importers — RBS Universal Grains Traders Corp. and Sodatrade Corp. — that collectively imported 273,000 metric tons of rice.

“If you look at it, the owners are one. That means there is clearly a conspiracy here,” Briones said, describing how such an arrangement consolidates their control over the market.

“We have plenty lot of rice supply, but where is it? Is it hidden? Did you find out where that rice is?” Briones asked, criticizing the Department of Agriculture’s inaction to investigate the stockpiles.

The lawmakers pointed out that this unscrupulous scheme not only leaves farmers struggling to sell their palay at fair prices but also has severe effects on the buying public, particularly those economically challenged.

They insisted that the price of rice should significantly drop from P50 or P60 per kilo given the P33.40 landed cost per kilo of imported rice.

“In other words, it is in the hands of the importers and traders who became richer by P13 billion because that is what they earned after the tariff dropped by 15 percent. They became richer by P13 billion as a whole,” Quimbo said.

“But they still withhold the rice. [I pray that they] have some mercy and release those rice stocks so the price would go down which by now should be around P35 pesos,” she added.

Prompted by the disparities in the prices, Salceda tasked the Bureau of Internal Revenue to look into the filings and tax payments of the top rice importers, following allegations of profiteering in the domestic rice trade.

“Congress cannot request for tax filings. They are protected by Section 270 of the Tax Code. But the BIR can verify their own assessments and records. These top importers are importing in the billions. So their tax payments should reflect that,” Salceda said.

He said that a charge of tax evasion would then allow the Anti-Money Laundering Council to look into the top importers’ transactions, “as tax evasion is a predicate offense that would allow the AMLC to look deeper.”

“This is just short of being supernatural. There is clearly pricing abuse — we just need to pinpoint at which stage,” he said. “We will be calling in the big retailers and big wholesalers next. Much of the profiteering seems to be in that sector, as well.”

The mega-panel, formed to resolve issues behind the growing prices of commodities, is set to hold a closed-door meeting with the DA today, Wednesday, to examine what efforts it has in place to curb price manipulation in the rice trade.