1-9-2023 (MANILA) The Philippines has taken decisive measures to shield consumers from the escalating cost of rice, a national staple, which is likely to have contributed to a surge in August’s inflation, marking the first increase in seven months.
As one of the world’s leading rice importers, the Southeast Asian nation finds itself cracking down on domestic price manipulation, facing mounting pressures from global events such as the Russia-Ukraine conflict, India’s rice export ban, and the volatile oil market.
President Ferdinand Marcos Jr has given his approval to the imposition of a maximum price of 41 Philippine pesos (S$0.98) per kilogram for rice, with well-milled rice capped at 45 pesos per kilogram. These mandated price ceilings will remain in force until the President, who also serves as the country’s agriculture minister, decides otherwise.
Currently, both local and imported well-milled rice are being sold for prices ranging from 47 to 56 pesos in the capital region. Likewise, local and imported regular-milled rice are priced at 42 to 55 pesos as of August 30, as reported by the Agriculture Ministry.
Despite a consistent supply of rice, authorities have reported widespread allegations of illegal price manipulation, including hoarding by opportunistic traders and collusion among industry cartels during the lean season, as stated by the presidential office.
The Philippines also contends with inflationary pressures stemming from global circumstances such as the Russia-Ukraine conflict, India’s rice export ban, and the unpredictability of oil prices. “There is no reason for any price increase these past weeks as there is no rice shortage in the country,” stated the group Sinag.
Earlier this week, Mr. Marcos issued orders to intensify efforts to locate and apprehend rice hoarders and implement measures to curb rice inflation, which reached 4.2 per cent in July, the highest level since 2019.
The Philippines ranks among the world’s leading rice importers, and retail rice prices continued to rise in August, with certain varieties surging by as much as 25 per cent in markets in and around the capital.
For the second half of the year, the Philippines anticipates a rice supply of 10.15 million tonnes, including an expected yield of 7.2 million tonnes from local production. Coupled with imports and existing inventory, this will enable the country to conclude the year with sufficient reserves to meet domestic demand for 64 days.
“Monetary policy has limited influence on controlling food inflation, but the Bangko Sentral ng Pilipinas may need to take action if second-round effects become prominent and inflation expectations become unmoored,” warned ANZ economists in an August 25 note, using the official name of the central bank.
