SCUTTLEBUTT

P9B to make P20 rice possible

The government’s promise of P20 rice is being met — but not without raising eyebrows across agriculture circles and budget offices.

Whispers are that the cash burn has already crossed P9 billion — and it’s not even election season.

Public records indicate that P5 billion was sourced from the President’s contingency fund, with an additional P4.5 billion in national government funding coursed through Food Terminal Inc., bringing the total subsidy to around P9.5 billion to maintain the retail price at P20 per kilo.

But make no mistake: this isn’t market magic. The actual cost of the rice, including procurement, warehousing, and logistics, hovers at around P33 per kilo. The math? A P13-per-kilo deficit — covered, for now, by public money.

Some say it’s a bold political maneuver. Others call it a short-term stunt with long-term costs.

As for the Rice Competitiveness Enhancement Fund (RCEF) — the P30-billion annual war chest created from rice tariffs to modernize farming — there has been no formal indication that it’s been dipped into. Its allocations remain protected under the law, reserved for machinery, seeds, credit and extension programs.

But insiders watching the books say the real concern isn’t today’s accounting — it’s what will happen when the contingency fund runs out and the pressure to find new funding sources grows.

Will the government keep subsidizing rice at this scale in 2026 and beyond? Or will other funds — no matter how “protected” —- be quietly rechanneled to keep the program alive?

While consumers line up for P20 rice, farmgate prices are quietly dropping. Reports from Central Luzon suggest some traders are offering as low as P8 to P12 per kilo of palay. At those levels, smallholder farmers are in the red before they even harvest.

Warehouses are finally being cleared out, allowing new palay procurement to begin. But even this relief is uneven, and not every farmer is guaranteed a buyer, especially if local traders continue lowballing prices under the weight of old NFA stock and imports.

The P20 rice is real—and so is the burn rate. While the RCEF technically remains untouched, the strain on public finances is mounting. As one budget observer put it: “There’s no such thing as a cheap subsidy. Someone always pays—eventually.”

Until then, the rice may be discounted, but the politics and the consequences are anything but.