The Department of Agriculture (DA) drew flak on Wednesday for setting the maximum suggested retail price (MSRP) of rice at P58, keeping the cost of the staple grain unreasonably high despite lower tariffs and excess supply.
DA Undersecretary Asis Perez told the House Quinta Committee looking into the high prices of rice and other agricultural products that they formulated the P58 MSRP based on the landed cost of imported rice.
But Agap Rep. Nicanor Briones said the MSRP was “unbelievable” considering that the tariff was reduced to P6.70 per kilo and rice prices in the world market had gone down by about P7, not to mention the farmgate price that also fell by P3.
“We have plenty of stock. The former stock level of 60 days became 80 days. It’s clear that warehouses are full [of rice stocks], but why isn’t it being brought out to lower the price of rice? Because no one is catching them,” added Briones, who slammed the DA and other agencies concerned for their apparent lack of action to curb price manipulation.
Philippine Statistics Authority data showed the country’s total rice stock inventory was estimated at 2.55-million metric tons in December last year, indicating an increase of 34.5 percent from the 1.90-million metric tons inventory in the same period in 2023.
Lawmakers argued that with the oversupply 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 must be flooded with rice stocks which should lead to a price drop.
Iloilo Rep. Ferjenel Biron, co-chair of the quinta panel, said the DA was misguided for using premium imported rice as a benchmark given that the country relies heavily on the domestic rice production which accounts for 75 percent of the entire rice consumption.
“In other words, the contribution of imported rice is only one-fourth. Why do we use the price of the imported rice to come up with the maximum SRP when the domestic price is cheaper?” Biron asked.
The lawmaker said the rice importers would be compelled to sell their products at a lower price or at least closer to the cost of the locally produced rice if the DA did not peg the MSRP on the landed cost of the imported rice.
“I agree that there must be a better way to address this and not just use [the] landed cost of imported rice as [the] basis for the MSRP, that’s true. But we are still working on the formula,” Perez countered.
“I don’t know how long it will take to come up with a perfect formula while the Filipino people are starving. It’s an emergency. We might not feel it because we can buy rice, but 26 percent of the Filipino population is considered poor,” Biron pointed out.
The P58 MSRP, according to Perez, was part of a pilot program for Metro Manila designed to address the higher rice prices in the region that reportedly ranged from P62 to P64 per kilo.
Apart from the landed cost of imported rice, he explained that a “reasonable markup for all those involved in the distribution chain” was also a contributing factor for coming up with the P58 MSRP.
Iloilo Rep. Janette Garin, however, cited reports that said the landed cost of imported rice only ranged from P35 to P39 per kilo, significantly lower than the DA’s MSRP. She said that even with logistics and markups, rice should not exceed P45 to P49 per kilo at retail.
According to the DA’s latest monitoring, the retail price of imported special rice has reached as high as P64 per kilo, while imported premium rice remains at P60 per kilo. Imported well-milled and regular-milled rice continues to be high at P54 and P48 per kilo, respectively.
Nonetheless, Perez said the DA is considering applying the P58 per kilo MSRP for premium imported rice to other rice varieties as well as to cap the price of the staple grain.
Lack of law enforcement
Briones attributed the persistent crisis that drives up rice prices to the failure of the DA and other agencies to enforce the Anti-Agricultural Economic Sabotage Act, which was signed into law in late September to impose stiffer penalties on those behind the orchestrated large-scale smuggling and hoarding of rice, which artificially inflates prices.
The law, which repealed the Anti-Agricultural Smuggling Act of 2016, established a national council composed of agencies such as the DA and is headed by the President to oversee the enforcement of the law.
However, nearly four months after the law took effect, Briones lamented that hoarders, smugglers, profiteers and cartels had not been apprehended because the council was not operational.
“It is clear to all of us that the consumer is being exploited, yet no one has been apprehended,” he said.
The law classifies smuggling, hoarding, profiteering and cartels as economic sabotage. Financing these unscrupulous acts will be considered economic sabotage. Life imprisonment and a fine five times the value of the smuggled or hoarded agricultural or fishery products will be imposed against violators.
Lawmakers have pointed to a “collusion” between rice importers and traders as the main factor driving the persistently high price of rice.
