President Ferdinand Marcos Jr. on Monday said the price at which the government buys rice from farmers will go up from P19 a kilo to P23 a kilo for dry and from P16 a kilo to P19 a kilo for wet unhusked rice.
The President said the NFA Council, which he chairs as Agriculture Secretary, agreed on the new buying prices at a meeting Monday.
He said that the higher buying price for palay would give the country’s farmers a better income.
At the same time, Mr. Marcos said the price ceilings that the government imposed will calm rice prices down.
Originally, the NFA considered the buying price of P20 and P25 a kilo but felt this might be too high and spike retail prices.
The new buying price of dried palay at P23 a kilo would require P15 billion, as opposed to P16 billion if the price was pegged at P25 a kilo.
The Department of Agriculture expressed its support for the new buying price.
National Economic and Development Authority (NEDA) chief Arsenio Balisacan said that the proposed changes would “help elevate farm gate prices.”
Meanwhile, Finance Secretary Benjamin Diokno said the executive department is discussing his proposal to reduce import tariffs on rice “at the highest level.”
Diokno issued this statement after farmers groups denounced his proposal and called for his resignation.
In a statement, he said this is part of a comprehensive strategy to reduce prices for consumers and mitigate a potential shortage of the staple grain due to the impact of the ongoing El Niño phenomenon.
“As discussions are underway, the Department of Finance maintains its support for an appropriate policy response that promotes the greatest good for the greatest number of Filipinos,” Diokno said.
Earlier, Diokno said the Department of Finance was proposing to reduce the 35 percent rice import tariff rates, for both ASEAN and MFN (most favored nation) rates, temporarily to 0 percent or at most 10 percent to arrest the surge in rice prices.
Rice, which accounts for about 9 percent in the consumer basket, was one of the triggers of the two-month high 5.3-percent inflation in August from 4.7 percent a month ago, according to the Philippine Statistics Authority.
The PSA said the bottom 30 percent of households felt the impact of higher rice prices the most. Data showed that regular milled rice in August 2023 averaged P43.34 a kilo nationwide, up 8.9 percent year on year, while well-milled rice averaged P47.63, higher by 8.1 percent from the same period last year.
Meanwhile, the leader of the minority bloc in the House of Representatives said the government price caps on rice must stay.
“The government should keep the caps on rice costs as long as these are needed to safeguard consumers against price shocks and counteract potential illegal acts of price manipulation, profiteering and hoarding,” the bloc’s leader, 4Ps party-list Rep. Marcelino Libanan said.
Libanan urged the government “to do everything it can to insulate consumers, especially low-income households, from precipitous and excessive increases in rice prices.”
“If necessary, the government should also subsidize rice traders, not just small retailers, in order to keep the price caps sustainable,” Libanan said.
Also on Monday, the Bureau of Customs (BOC) said it seized more than P400 million worth of smuggled rice and other imported products in another operation on three warehouses in Tondo, Manila.
Customs Commissioner Bienvenido Rubio said the confiscated goods were discovered in a raid of the warehouses and found P310 million worth of imported miscellaneous goods, such as children’s toys, cosmetics, kitchenware, household wares, videoke machine, fabrics, cosmetics, pharmaceutical products, shoes, apparel, and general merchandise.
Also confiscated were 36,086 sacks of rice from Vietnam, Thailand, and Myanmar with an estimated amount of P90.2 million.
Intelligence Group Deputy Commissioner Juvymax Uy said the operation stemmed from confirmed intelligence reports that rice and other smuggled items were being stored in warehouses in Tondo.
