DAY TWO | Prices of rice stay above the government-imposed cap as shown in this photo taken on Sept. 6, 2023, at the Marikina City public market as retailers sell varieties not covered by the directive. (Photo by GRIG C. MONTEGRANDE / Philippine Daily Inquirer)
MANILA, Philippines — The Federation of Philippine Industries (FPI) on Wednesday urged the government to limit the implementation of the price ceiling on rice to two to three weeks, warning that prolonging such a regulation could bankrupt small stores unable to cope with mounting losses.
Executive Order No. 39, which capped the price of regular-milled rice at P41 a kilo and P45 for the well-milled variety, took effect last Tuesday. The EO, however, did not provide an end date for the price ceiling, except to say that it “shall remain in full force and effect unless earlier lifted by the President upon the recommendation of the Price Coordinating Council or the DA [Department of Agriculture] and DTI [Department of Trade and Industry].”
FPI chair Jesus Arranza told the Inquirer that while they supported a temporary price ceiling on rice, two to three weeks should be enough time for authorities to go after rice hoarders and arrest the high cost of the food staple that the price control measure was meant to address.
“I can say this because during my younger days, I used to join government raids,” said Arranza, who is also the convener of the Fight Illicit Trade (Fight IT) Movement.
The FPI official added that there should be some paper trail from the warehouses raided by the government and authorities could go after the owners and start tracking the masterminds from there.
Asked what he thought would happen if the price ceiling is extended longer than their suggested period, Arranza cautioned that some retailers could close shop without proper government support.
“If the period is prolonged, the government can also lose the public’s trust in handling the issue. Also, if hoarding will persist, it would mean that available supply could continue to go down,” he noted.
According to the Grains Retailers Confederation of the Philippines (Grecon), many of its 65,000 members bought well-milled rice at P50 a kilo and P45 for the regular-milled commodity.
Grecon president James Magbanua said a typical retailer sells around 20 to 30 bags of rice a day, and complying with the P45-a-kilo ceiling would result in losses of P5,000 to P7,500.
“[I will] explain to them why we must not shy away from the challenge and that we need to comply with the EO, but this should be temporary,” he added.
Magbanua said that while the retailers were surprised by the EO, they would abide by the order as “responsible citizens.”
“We want to support the executive order although we want to raise our concerns as most of our members were not able to prepare for the EO,” he said.
Cash assistance
The national government has vowed to provide financial assistance to small retailers to be affected by the price ceiling and Social Welfare Secretary Rex Gatchalian on Tuesday said these merchants would get a maximum of P15,000 to cover part of the losses they are expected to incur.
Speaking at the Laging Handa public briefing on Wednesday, DTI Assistant Secretary for Legal Services and Legislative Affairs Agaton Teodoro Uvero said many retailers have already complied with the rice price ceiling and the agency was already focusing on dissemination, monitoring, and validation of the list of retailers eligible for the cash assistance.
Uvero said that in Metro Manila alone, up to 25,000 retailers would be getting the cash aid from the Department of Social Welfare and Development, which is expected to start the payout before the weekends.
The number includes retailers based in public markets who are already registered with the local government units (LGUs), while the DTI would also help track down sari-sari stores, micro-stores, and barangay-based rice retailers not registered with the LGUs but are eligible for the subsidy.
Uvero said the DTI was also preparing an interest-free loan program for small retailers affected by the price cap and was coordinating with the DA and LGUs for logistics support by delivering rice supplies from the warehouses straight to the retailers to further lower the selling prices.
He reiterated the government’s declaration that the price cap was only a “stopgap” or temporary measure and would be lifted in the next few weeks with the onset of the harvest season and the arrival of imported rice that could stabilize prices.
At the Laging Handa briefing, Philippine Rice Industry Stakeholders Movement lead convener Rowena Sadicon questioned the timing of the imposition of the price ceiling considering that the price of rice was expected to go down with the onset of the harvest season and that palay prices were already starting to decline.
“Nevertheless, we hope, [that] if there’s nothing like this (price cap), maybe we won’t be able to fix [the system] correctly,” she said.
Funding source
The House of Representatives has allocated P2 billion for the financial assistance to small rice retailers, and if more fund would be needed, Albay Rep. Edcel Lagman on Wednesday suggested that President Marcos’ P13 billion in contingent funds could be the source of money for subsidies to rice retailers.
“The contingent fund is provided to respond to unforeseen urgent and critical circumstances during the fiscal year, and it is not limited to specific occurrences and obligations,” Lagman said in a statement.
For Lagman, since the Office of the President (OP) was able to transfer millions worth of confidential funds to the Office of the Vice President (OVP) last year, the contingent fund could once again be tapped this time to help small rice retailers in need.
Lagman was referring to the P221.4 million worth of confidential funds transferred to the OVP by the OP in 2022.
Meanwhile, local governments have also come to the aid of small rice retailers.
On Wednesday, Quezon City Mayor Joy Belmonte acknowledged the struggles faced by some market stalls and shops, which temporarily shut down as they grappled with the impact of the rice price cap, and promised to help retailers within the city.
“We will find ways to help them because if they stop their business, the families of their employees, mostly QC residents, would be affected,” she said.
While Belmonte supported the implementation of EO 39, she said that the city government would first ensure “safeguarding the interests of all stakeholders.”
She said that they were considering waiving rental fees or offering discounts to rice dealers, wholesalers, and retailers.
The city official has also tasked the QC Price Coordinating Council Enforcement Team to closely monitor the compliance of all markets.