Rice price puzzle: PCC, DA break down why costs don’t match supply

ACT Teachers Representative Antonio Tinio on Monday, 6 October 2025, sought clarification from the Philippine Competition Commission (PCC) and the Department of Agriculture (DA) on rice prices that seem disconnected from supply levels and seasonal patterns.

"If there's an excess supply, shouldn't prices go down? Why do we not see a significant price reduction despite reports of rice oversupply?" Tinio asked.

[Hindi ba pagka may sobrang supply, dapat bumababa ang presyo? Pero bakit tila hindi markado ang pagbaba ng presyo kahit sinasabing may mga panahon na sobra ang supply ng bigas?]

Senior economist Carlos Vega of the PCC explained that market imperfections can affect rice pricing, noting that some traders may have the power to dictate prices.

"It's possible that some traders have the power to dictate their prices. This is just one possible source of market imperfection," Vega said.

Tinio also raised concerns from farmers, who reported that rice selling prices often drop during the wet season, a period that typically brings higher farmgate prices.

DA Secretary Francisco Laurel Jr. explained that the country’s limited rice-drying capacity affects grain quality during wet weather, influencing prices at the milling level.

“Our major issue during what we call the wet season is that we are not equipped to handle the rice grain that is wet. Our capacity to mechanically dry what we harvest is only eleven percent. Our other drying methods are mostly on the streets and basketball courts, but that's not possible when it rains," Laurel Jr. said.

Tinio speculated that some businessmen might exploit the rainy season to unfairly price rice without economic justification. Laurel Jr. acknowledged such cases may exist, but noted that most traders adopt a conservative stance due to higher risks in wet-season rice supply.

“There are really some businessmen that might take advantage of the situation, but I think the majority of the traders or the millers would rather take a conservative stance because of the bad quality," he said.

“You can't be sure if that product will sell in the market or not. You don't know if your expected recovery rate will even hit sixty percent; it might fall to as low as forty-five to fifty-nine percent. Because the risk is higher, you have to be more conservative in your business decisions,” Laurel Jr. added.