House lawmakers on Tuesday urged the Department of Agriculture (DA) to reconsider the P58 maximum suggested retail price (MSRP) for imported premium rice, deeming it “unnecessarily high” and encouraging “collusion” among retailers who sell their supplies at a lower price.
At the fifth hearing of the House quinta committee, Marikina Rep. Stella Quimbo argued that the P58 price cap enables retailers to exploit it and engage in anti-competitive practices because they perceived it as a “government-approved” excuse to sell rice at a higher cost.
“What is happening is they (retailers) now collude around the higher MSRP. Retailers will say, 'Well, the P58 MSRP is allowed then, all of us, let's just sell it at P58,’ even though they can sell it at P38,” she said in Filipino. “Apparently, it became a government-endorsed collusion. Instead of transparency and competition, this creates a market standard that works against the public.”
Bulacan Rep. Augustina Pancho raised the same concern.
"That's very high. It seems that it is the government that gives permission to sell it at a high price because that is legal. So, [the price of rice] will not really drop because the MSRP of P58 comes from the government itself,” she stressed.
Pancho also implied that the MSRP might just prompt retailers to fraudulently declare local supplies as imported premiums because that is “allowed” by the government.
The P58 MSRP has been in effect for one week now, according to DA Assistant Secretary Genevieve Guevarra.
She explained that the P58 MSRP was the consensus agreed upon following a “series of meetings” with rice importers and retailers and was based on global rice prices, freight, insurance, and tariffs. She claimed that compliance in Metro Manila markets was high.
“In our monitoring, we see only two brands that are in the P58 range. Almost all of the 30 markets that we are monitoring now comply with the P58 MSRP,” Guevarra told the panel.
The DA, she said, intends to reduce the MSRP to P55 in February and P49 by March, subject to global price movements. She explained that the “market also needs to adjust” to the current MSRP until such time that the existing stocks are exhausted.
“We will review the P58 every two weeks. The secretary also declared that we won't be able to immediately drop the MSRP below P58 because this price is still based on the previous month. The existing stocks that [suppliers] bought at a higher price must be first disposed of,” she stated.
Quezon Rep. Mark Enverga, co-chair of the panel, however, argued that it must be the supply chain that has to adjust to the MSRP and not the buying public.
“The goal should be to influence the supply chain to reduce profit margins across the board. But why are we allowing such a large markup? Shouldn’t we pressure everyone to adjust their profit margins instead?” he countered.
“If the MSRP can go down, then it should go down immediately. Why wait? Why allow additional profits for traders and retailers when prices can already be lowered?” he argued.
Members of the panel have insisted that the P58 was unreasonable given the lower tariffs caused by the enforcement in July of Executive Order 62 — reducing the tariff cut on rice import from 35 percent to 15 percent — and the reported excess supply of rice not to mention the declining global rice costs.
Guevarra, however, cited the efficiency of the benchmark, claiming that the market is currently dominated by lower prices and they no longer spot retailers selling the staple grain P60 above.