Philippines imposes cap to stem soaring rice prices

Philippine President Ferdinand Marcos Jr. on Friday imposed a freeze on the price of rice, the country’s staple food, in an attempt to control surging prices of a commodity that has significant political implications in the country.

An executive order set a price ceiling for regular and well-milled rice at 41 pesos and 45 pesos (U.S. 72 and 79 cents) per kg. This is significantly higher than the 20 pesos (35 cents) per kg. he promised during his 2022 presidential campaign. 

Independent surveys suggest that his promise to bring down rice prices had significantly influenced Filipinos who voted for him. But over a year into his presidency, rice prices remain high in a country where the minimum wage is about 600 pesos ($10.58) per day.

Rice inflation surged to 4.2% in July, the highest since 2019, government data showed. The nation’s central bank recently said that it expects total inflation in August to settle within a range of 4.8% to 5.6%, linked to soaring rice prices.

Other basic commodities, such as onions and sugar, have seen high prices because of shortages. Earlier this year, Marcos authorized emergency onion imports to stabilize the market. 

On Friday, Trade Secretary Fred Pascual said the price cap for rice was determined based on the average prices of the commodity over the past three months.

“The imposition of this price ceiling is aimed at protecting Filipino consumers from unjust or unfair sales practices,” he told reporters, adding that the government sought to safeguard lower-income Filipinos from the “disproportionate burden” when prices of goods rise rapidly.

Varieties of rice “commonly consumed” by the public are subject to the price ceiling, he said, but pricier “special and premium” types are excluded.

The president’s intervention was followed by a joint recommendation from the departments of agriculture and trade. Those departments report rice supplies in the Southeast Asian nation have reached “a stable level” as rising imports boost local supplies. 

Despite that, the order noted, retail prices remain volatile because of manipulation including “hoarding by opportunistic traders and collusion among industry cartels” as well as “global events taking place beyond the Philippines’ control, such as the Russia-Ukraine conflict, India’s ban on rice exportation and the unpredictability of oil prices in the world market.”

The Samahang Industriya ng Agrikultura, a farmers’ advocacy group, welcomed Marcos’ move, stressing that the country had sufficient supplies to implement a price freeze.

“There is enough buffer stock, and according to the statement of the agriculture department, and based on our calculation, there is no shortage,” Jayson Cainglet, the group’s executive director, said in a local radio interview. “Even if the farmgate price is 25 pesos (44 cents), no stakeholders will lose money.”

But it’s unclear how effectively Marcos’ decree will bring stability to the rice market.

The president asked the Philippine Competition Commission to coordinate with the national police to implement the order.

Last week, customs police raided and shut down three warehouses in a province just north of Manila suspected of hoarding imported rice in a bid to artificially force prices up.

House Speaker Ferdinand Martin Romualdez, who is Marcos’ cousin, praised the order on Friday as a “timely intervention” and promised a separate investigation into alleged price manipulation and hoarding.

“By collaborating closely with the executive branch, we aim to strengthen systems and mechanisms that uphold consumer welfare, ensure fair market competition, and eliminate unscrupulous practices that harm our economy and, most importantly, our people,” he told reporters in Manila.