Story and photo by Lara Climaco i FilAm Star Correspondent
Well-stocked store shelves in Metro Manila belie claims of any rice supply shortage.
Instead, hoarding borne of a flawed local supply chain is at the root of high rice prices that have caused headline inflation to peak at 6.4 percent in August.
But the government will inundate the market with imported rice, fish and sugar anyway and is set to intervene in the trading of chicken and vegetables to tame run-away prices of essential food products. At the same time, it is intensifying market monitoring activities and asking retailers found with exorbitant prices to explain their pricing.
At PHP 160 per kilo, chicken is currently overpriced, according to the Department of Trade and Industry’s Consumer Protection Group (DTI-CPG), which conducts market monitoring together with the Department of Agriculture (DA), National Food Authority (NFA) and the Criminal Investigation and Detection Group of the Philippine National Police. Other food items such as rice, fish, pork and vegetables are priced reasonably, based on the group’s survey at a public market in Manila last September 7.
“We assure the consumers that the 27-peso and 32-peso variants of NFA rice are available in the market. The NFA Council, which the DTI is part of, is working together to ensure that stocks are distributed regularly to all NFA accredited retailers,” DTI-CPG Undersec. Ruth Castelo was quoted in an agency press release.
The government’s Economic Development Cluster (EDC) met for the third time last September 5 to discuss mitigating measures after the Philippine Statistics Authority (PSA) reported that food prices spiked to unexpected levels in August. With headline inflation at 6.4 percent for the month, the year-to-date inflation rate stands at 4.8 percent, which is “beyond the upper-band of the government’s inflation target of 2 to 4 percent, and slightly below the BSP’s (Bangko Sentral ng Pilipinas) revised full-year inflation forecast of 4.9 percent,” the EDC said in a joint statement issued Wednesday.
To try to arrest the inflation, some 4.6 million sacks of rice available in NFA warehouses will be immediately released across the country, with 2.7 million sacks to be allocated to Zamboanga, Basilan, Sulu and Tawi-Tawi where scarcity reached crisis levels last month.
The local governments of Zamboanga and Basilan have declared a state of calamity in order to impose price controls in their respective areas.
Before the end of this month, about 2 million sacks of imported rice will be delivered. Ten million more sacks will be imported until early next year, with the first 5 million sacks expected to arrive by October.
The EDC also noted that harvesting season has started in many parts of the country, and that the projected harvest for 2018 is 12.6 million metric tons, equivalent to 252 million sacks of rice.
To lower the prices of fish and sugar, the DA has promised to boost local supply with imports directly distributed to markets around the country. It will also put up cold storage facilities in designated public markets where poultry producers may directly sell chicken at more reasonable prices. According to the DTI, the farmgate price of chicken is only PHP 80 per kilo and that PHP 50 is the usual mark-up. Lately, the mark-up has been raised to PHP 80 per kilo.
“The economic managers have agreed to recommend to the President the issuance of a directive to further simplify and streamline the licensing procedures for rice imports of the NFA. Moreover, we urge the Senate to immediately pass the Rice Tariffication Bill within the month,” the EDC noted in its joint statement.
Stabilizing rice prices is critical because it is a key factor affecting headline inflation, being the primary staple food of Filipinos. “A shift from quantitative restrictions on rice in favor of tariffication will reduce its retail price by four to seven pesos,” Budget Sec. Ben Diokno said in a separate statement that endorsed the Rice Tariffication Bill, which is seen as the long-term solution to rice supply problems.
The House of Representatives already passed its version of the bill last month but the Senate is still deliberating on it.