Neda: Price cap on rice lifted soon
The price ceiling on milled rice, being implemented for the fourth week, may be “lifted soon” considering that it has so far helped bring down prices of the staple grain and would not be good to keep in force for a long time, according to the government’s top economist.
Executive Order No. 39, signed on Aug. 31, pegs the price of a kilo of regular milled rice at a maximum of P41 and of well-milled rice at P45.
Secretary Arsenio Balisacan of the National Economic and Development Authority (Neda) said in an interview with ANC that EO 39 “is supposedly and is expected to be” only a short-term, temporary measure.
“No long-term price control, when viewed in a long-term perspective, has worked anywhere,” Balisacan said.
When asked when implementation of the price ceilings would end, Balisacan said “very soon.”
‘To protect consumers’
“Even the President is well aware of the dangers of a long and unnecessary price cap. He just has to be assured, to see the data, that the [needed policy] tools are used to protect the consumers, especially the vulnerable sectors,” he added.
He added that even in socialist regimes in centrally controlled economies like China and Vietnam got rid of price controls.
Even then, he said EO 39 was working as a temporary measure to address temporary issues in the domestic rice market.
“When the inflation number for rice in the month of September comes out [next week], that number is expected to be lower than it would have without price caps,” Balisacan said.