Lawmakers are blaming "collusion" between unscrupulous rice importers and traders as the main factor driving persistently high rice prices, despite reports of oversupply and reduced import tariffs.

At the second hearing of the House Quinta Committee on Tuesday, Marikina Rep. Stella Quimbo argued there is no reason why rice costs should remain high, citing a report from the Philippine Statistics Authority (PSA) indicating an excess supply of rice.

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

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

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

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

Retail prices of regular milled rice in October recorded a 1.7 percent decrease, with prices falling to P50.22 per kilo from P51.07 per kilo in June. Farmgate prices of palay likewise dropped from P24.65 to P20.51 during the same period.

NEDA-Agriculture, Natural Resources, and Environment Staff Director Nieva Natural stated that international market prices of rice (five percent broken) from top import sources Vietnam and Thailand continued to decline from June to October.

Rice supply should abound

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

Natural highlighted that the average landed cost of imported rice has significantly declined following the tariff reduction. Data from the Bureau of Customs showed the average landed cost of imported rice (five percent broken) from Vietnam dropped to P33.95 per kilo in October from P41.32 in June. Thai rice similarly saw a 17.3 percent decline to P33.96 per kilo from P41.08 during the same period.

Committee chair Joey Salceda, also an economist, noted that rice prices in the country should stabilize at around P35 per kilo, a 15 percent reduction from current prices.

Agap Rep. Nicanor Briones agreed with Quimbo, suggesting the persistently high price of rice is 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 just one. That means, there is clearly a conspiracy here," Briones stressed, describing how such arrangements consolidate 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 (DA) inaction in investigating stockpiles.

Lawmakers pointed out that such schemes leave farmers struggling to sell their palay at fair prices and burden consumers, particularly the economically challenged.

They insisted rice prices should significantly drop from P50 to P60 per kilo given the P33.4 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 due to the tariff dropped by 15 percent. They became richer by P13 billion as a whole," Quimbo claimed.

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

BIR involvement

Prompted by the price disparities, Salceda tasked the Bureau of Internal Revenue (BIR) to review the tax filings and payments of top rice importers, following allegations of profiteering in the domestic rice trade.

“Congress cannot request 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 claimed that tax evasion charges would allow the Anti-Money Laundering Council (AMLC) to investigate top importers’ transactions. “Tax evasion is a predicate offense that would allow 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 retailers wholesalers next. Much of the profiteering seems to be in that sector, as well.”

The mega-panel, formed to address issues behind soaring commodity prices, is set to hold a closed-door meeting with the DA today, Wednesday, to scrutinize its efforts to curb price manipulation in the rice trade.

During the hearing, Iloilo Rep. Janette Garin criticized the DA and other concerned agencies for their lack of urgency in lowering the costs of staple foods, particularly rice.