House sets P2-billion aid to ease impact of rice price cap

MONITORING | Rice prices in Cartimar, Pasay City, on the eve of the price ceiling which takes effect today, Sept. 5, 2023. (Photo by MARIANNE BERMUDEZ / Philippine Daily Inquirer)

MANILA, Philippines — The House of Representatives is earmarking P2 billion to ease the impact of the price ceiling on rice on retailers who bought their stocks above the cap of P41 a kilogram for regular-milled and P45 for well-milled rice set under Executive Order No. 39, which takes effect today.

Speaker Martin Romualdez on Monday said he had asked House appropriations panel chair Rep. Elizaldy Co to coordinate with the Department of Budget and Management (DBM) on the allocation for rice retailers.

Co said his committee would sit down with Budget Secretary Amenah Pangandaman to explore fund sources for the P2-billion aid to rice retailers.

“We will promptly engage with the DBM to expedite the release of the P2 billion funds for our rice retailers,” he added.

The Office of the House Speaker said the P2 billion would primarily come from the 2023 national budget.

The country’s biggest business organization also appealed to consumers not to panic since there is enough supply of rice in the local market.

“There’s enough for us to cover the market demand. The message here is that we hope that the public will not be too overly concerned or frantic about hoarding or buying too much,” Philippine Chamber of Commerce and Industry (PCCI) president George Barcelon said in a phone interview.

President Ferdinand Marcos Jr., who left for Jakarta late Monday to attend the Association of Southeast Asian Nations Summit, said he would monitor the enforcement of EO 39 — reiterating that studies conducted by the Department of Agriculture (DA) and other agencies “found no good reason” why the price of rice should exceed P50 a kilogram. The president concurrently heads the DA.

“[Based on] our study, the only reason for this is that smugglers and the hoarders are really there,” he said in his departure speech at Villamor Air Base.

He added that as much as possible he did not want to intervene in the market dynamics and preferred to “let the market do its work.”

“But our market is being manipulated. That is why the government has to step in and this is what we did—we put a price ceiling for rice,” Mr. Marcos said.

The Presidential Communications Office said Mr. Marcos on Monday had earlier met with officials of the DA, DBM, the Department of Trade and Industry (DTI), the Department of Social Welfare and Development (DSWD), and the Department of the Interior and Local Government to discuss the agencies’ proposals on how to assist rice retailers.

He said the government “understands” the plight of retailers who would naturally protest being compelled to sell at a price lower than that of their suppliers.

The President said the DA and the DTI would identify and list the rice retailers affected by the price cap, adding that the DSWD would soon prepare the assistance for them.

“After we calculate the losses of our rice retailers, we will give the equivalent assistance,” Mr. Marcos said.

The DTI, on the other hand, will implement financial assistance, loan programs, logistics support and market linkages to retailers in wet markets and neighborhood sundry stores or “sari-sari” stores.

Other initiatives include linking local farmers with supermarket chains and other retailers, finding alternative markets, and promoting bulk buying or advance purchases as well as providing transport for rice stock purchased at the level of the price ceiling or above to Diskwento Caravan sites, where they would be sold directly to consumers.

The DA will also have an inventory and supply management of rice among major rice producers, and will intensify the Bantay Presyo Task Force that will enforce rice prices.

Revenues from rice imports

Social Welfare Secretary Rex Gatchalian said the assistance to affected retailers would be in the form of a financial payout under the “sustainable livelihood program”—which the agency offered during the pandemic lockdown to distressed sectors such as tourism establishments and small businesses.

“The DSWD mechanism for the payout is ready. We’re just waiting for the list [of qualified retailers] from the concerned agencies,” Gatchalian said.

Also on Monday, House Deputy Speaker Rep. Ralph Recto urged the government to tap the P38.52 billion in tax revenues from rice imports, to aid farmers who would be affected by the price ceiling.

Recto noted that farm-gate prices of palay had plunged to P19 a kilogram, from P23 early this year, as a result of EO 39.

Since the cap is below current retail prices, traders have to lower their offer to palay farmers since they still have to spend for milling, storage, and transportation and add their profit margin to their selling price for rice.

“If half of the forecast palay harvest for this year is affected, that’s 10 million metric tons. Farmers will lose P40 billion during [the current] harvest season,” Recto estimated.

He proposed that farmers be compensated by tapping the rice import tariff collections from January to August this year.

Recto noted that the Bureau of Customs collects P80 million a day from the import duties on rice, adding that these tariff collections are pooled under the Rice Competitiveness Enhancement Fund (RCEF).

Republic Act No. 11203, or the Rice Tariffication Act, states that P10 billion of the RCEF will be returned to farmers in the form of equipment and farm inputs purchased by the DA.

Other solutions

RA 11598, or the Cash Assistance to Filipino Farmers Act, provides that the DA may tap the excess of P10 billion from the RCEF as direct cash aid to rice farmers tilling two hectares of land or less.

Recto also called on Congress to amend the rice tariffication law to “authorize direct cash payments to farmers using past RCEF collections as this will benefit the rice-producing poor.”

“The money in the RCEF should be given to all rice farmers and not just those working on two hectares of land or less, and the cash component should not be sourced from the excess of P10 billion,” he said.

He also urged the President to “temporarily reduce import duties to benefit the rice-consuming poor.”

RA 11203 authorizes the President to allow the importation of rice at a lower tariff rate if there is an imminent or forecast shortage or any other situation requiring the government’s intervention.

The President may exercise this power only when Congress, which will go on break by Sept. 29, is not in session.

—WITH A REPORT FROM ALDEN M. MONZON

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