Subsidizing rice in emergency to cost government P2.25 billion
Credit to Author: Jasper Emmanuel Arcalas| Date: Wed, 5 Feb 2025 00:00:00 +0800
MANILA, Philippines — Losses of up to P2.25 billion will be absorbed by the government due to the sale of subsidized rice in the market during the state of food security emergency, but officials maintained the measure is necessary to influence prevailing retail prices that have remained exorbitant.
Aging rice stocks of the National Food Authority (NFA) would be sold to local government units (LGUs), Kadiwa centers and other state entities at P33 per kilo, the Department of Agriculture (DA) said.
Partner LGUs are expected to sell rice to constituents at a suggested retail price of P35 per kilo.
The amount would be enough to cover logistics costs, Tiu Laurel said.
The NFA is estimated to lose between P1.8 billion and P2.25 billion in six months for selling 150,000 metric tons of rice, as the approved selling price is P12 to P15 per kilo lower than its break-even cost.
Possible sanctions against LGUs that would sell rice above P35 per kilo will be outlined in guidelines that the government is still drafting.
Computation of the selling price accounted for costs incurred in palay procurement, milling and storing of grains, as well as a so-called social discount, according to Roy Untiveros, acting manager of the NFA’s operations department.
The DA has reduced the maximum suggested retail price (SRP) for imported premium rice today, from P58 to P55 per kilo.
The reduced max SRP reflects easing rice prices in the world market, the DA said.
Metro Manila markets are implementing the max SRP on five-percent broken imported rice at present. It will be enforced nationwide on Feb. 15, the agency noted.
Agriculture Secretary Francisco Tiu Laurel Jr. is expecting the max SRP to decline in the coming weeks, possibly to below P50 per kilo by early March.
“After this reduction, we plan to lower it further to P52 a kilo by mid-February and then to P49 per kilo two weeks after. This should reflect the lower global prices of rice and the reduced tariff,” Tiu Laurel said yesterday.
Rice prices have continued to rise despite a 20-percent tariff cut.
The DA devised the max SRP to stabilize rice prices and alleviate inflationary pressure on the country’s staple.
Imposing a max SRP would have a domino effect on the prices of other rice varieties sold in the market, agriculture officials said earlier.
Five-percent broken rice is considered premium based on the NFA’s classification. It has been the widely imported variety by importers and traders since the rice industry was deregulated in 2019.
Imported premium rice is currently sold between P51 and P58 per kilo in Metro Manila markets with an average price of P54.3 per kilo, based on the DA price monitoring report.
Imported well-milled rice, meanwhile, ranges from P40 to P52 per kilo, while its regular-milled counterpart costs P38 to P48 per kilo, the report showed.
Declaring a food security emergency on Monday is a publicity stunt that failed to address the worsening rice crisis, according to Gabriela Rep. Arlene Brosas.
The House assistant minority leader also criticized the DA for releasing 300,000 metric tons of buffer rice through Kadiwa stores, saying it is an inadequate band-aid solution that will last only three days.
“This might be just another election gimmick to use cheap rice distribution for their candidates’ campaigns,” Brosas said, recalling President Marcos’ 2022 campaign promise of P20 per kilo of rice.
The rice liberalization law, she said, must be junked.
“What we need is genuine land reform, adequate subsidies for farmers and fair prices for their produce to ensure food security,” Brosas said. — Christine Boton, Jose Rodel Clapano