DOF exec who posted about price cap effect ‘forced to resign’

Finance Undersecretary Cielo Magno resigns from post on Thursday, September 7. | PHOTO: University of the Philippines School of Economics website

Finance Undersecretary Maria Cielo Magno, one of the Marcos administration’s champions for economic policy reforms, has been forced to vacate her post effective Sept. 16 and is returning to her teaching job at the University of the Philippines School of Economics (UPSE).

This happened after Magno, a Marcos appointee, apparently expressed frustration that a key national policy—the price cap on rice—went against basic economic concepts.

Magno, an associate professor at UPSE, is on temporary loan or “on secondment” to the Department of Finance (DOF), serving as head of the agency’s fiscal policy and monitoring group.

On Thursday, as news of her resignation spread, Magno posted a quote card on Facebook that says: “A wise man told me, if you do your job with integrity, you will be back in UPSE soon.”

In an exchange of messages with the Inquirer, the economist said that she was now processing her clearance from the DOF so that she could “move back my papers to UP,” something which she is excited about.

“I will have more space to speak truth to power while in UP,” Magno said.

Supply and demand

When asked whether she quit without being prompted or was made to do so, Magno said she was “forced to resign.”

Asked further whether she had regrets, Magno said: “I am happy and excited to be back in UP. I am grateful for the opportunity to serve the Filipino people. I can sleep soundly at night knowing that I did my best to serve the interest of the public.”

She did not recount exactly why she was leaving the DOF, but on Sept. 2 Magno posted on her Facebook page a textbook graph depicting the concept of a price ceiling—lines that show the relationship and interplay among supply, demand and prices of a commodity.

This was two days after President Marcos signed Executive Order No. 39, which imposed a price ceiling of P41 a kilo on regular-milled rice and P45 on well-milled rice.

The administration’s top economists—Secretary Arsenio Balisacan of the National Economic and Development Authority (Neda) and Finance Secretary Benjamin Diokno—who are also from UPSE, both made assurances that price ceilings do work if managed correctly and implemented for a short time.

Economic theory says that mandated price caps create supply shortages when the price ceiling is below a level where supply and demand meet, or the “equilibrium price.”

Tax reforms

Since the commodity is priced below the economically sensible level—or cheaper than it should be—more people want it, such that some buyers will find it sold out because of increased demand.

In her post of the price ceiling graph, Magno said, “I miss teaching..(emoji of a classroom teacher).”

Among the many comments, mostly from fellow economists, that Magno’s post elicited was from Karl Chua, head of Neda during the latter part of the Duterte administration.

“[You] can teach it in [the] Cabinet,” Chua said.

Ironically, Chua became Neda chief as replacement for UPSE professor emeritus Ernesto Pernia, who himself quit his post citing the need for a unified voice in the Cabinet, which his absence would provide.

Also, before Chua became Neda chief, he was the champion of reforms and policies that Malacañang wanted the public to accept and the lawmakers to pass—much like Magno.

Magno has been instrumental in shepherding proposed reforms in the pension system of military and uniformed personnel, from consultations with affected parties to the filling of bills in Congress.

She has also been actively involved in pushing for the Marcos administration’s proposed tax reforms and in improving the taxation on the mining industry.

Magno earned her doctorate degree from Northeastern University in the United States. She got her bachelor’ degree in Business Economics and master’s degree in Economics—from UP.

At UPSE, she taught Development Economics, Environmental Economics, Human Resource Economics, Institutional Economics, Microeconomics, Public Economics.

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