President Ferdinand "Bongbong" Marcos Jr. has approved the recommendation to impose a mandated price ceiling on rice in the country amid the "alarming" increase in its retail prices.

Marcos made the order through Executive Order (EO) No. 39, signed by Executive Secretary Lucas Bersamin on Aug. 31, which came after a sectoral meeting on Aug. 29 where he was briefed about the country's rice situation.

Based on the EO, the President approved the recommendation of the Department of Agriculture (DA) and the Department of Trade of Industry (DTI) to set price ceilings on rice in the country.

Effective starting Sept. 5, the mandated price ceiling for regular milled rice is P41 per kilogram, while it is P45 per kilogram of well-milled rice.

"The mandated price ceilings shall remain in full force and effect unless lifted by the President upon the recommendation of the Price Coordinating Council or the DA and the DTI," the EO read.

As of Aug. 28, the DA reported the local regular milled rice in markets in Metro Manila ranged from P42 to P55 per kilogram. Meanwhile, local well-milled rice stood at P48 to P56 per kilogram. 

In his EO, Marcos said it was important for the government to address the situation and ensure Filipinos could access the staple grain.

"The current surge in retail prices of rice in the country has resulted in a considerable economic strain on Filipinos, particularly those who are underprivileged and marginalized," he said.

"In light of the current situation, it is crucial and urgent for the State to guarantee that basic necessities are not only sufficient but also reasonably priced and conveniently accessible to every Filipino," he added.

With this, Marcos directed the DA and the DTI to ensure the strict implementation of the mandated price ceilings, monitor and investigate abnormal price movements of rice in the market, and provide assistance to affected retailers with the help of the Department of Interior and Local Government (DILG).  

The President likewise ordered the Bureau of Customs (BOC) to intensify its inspections and raids of rice warehouses to combat hoarding and illegal importation of rice in the country. It shall also facilitate the confiscation, seizure, or forfeiture of smuggled rice.

Just last week, the BOC raided and closed three Bulacan warehouses for allegedly storing imported rice worth more than P500 million.

In addition, Marcos directed the Philippine Competition Commission to implement measures against cartels or those abusing their dominant position in the market to ensure fair market competition and uphold consumer welfare and protection.

Meanwhile, the Chief Executive tasked the Philippine National Police (PNP) and other law enforcement agencies to assist the DTI and the DA and to ensure the immediate and effective enforcement of the price ceilings on rice in the country. 

Republic Act (RA) No. 7581, or the Price Act, allows the President, upon the recommendation of the implementing agency or the Price Coordinating Council, to impose a price ceiling on any basic necessity or prime commodity in compliance with the conditions set by the law.

Rice supply

During the sectoral meeting on Aug. 29, the DA reported its projection that rice supply for the second semester would reach 10.15 million metric tons (MMT), 2.53 MMT of which is ending stock from the first semester while 7.20 MMT is the expected yield from local production and only 0.41 MMT is imported rice.

The total supply would be more than enough to cover the current demand of 7.76 MMT and will yield an ending stock of 2.39 MM that will last up to 64 days.

Based on the projection, EO 39 stated the DA and the DTI "have reported that the country's rice supplies have reached a stable level and are sufficient owing to the arrival of rice imports and expected surplus on local production."

However, the EO noted that there was still widespread practice of alleged illegal price manipulation, hoarding by opportunistic traders, and collusion among industry cartels in light of the lean season.

The EO also cited global events beyond the Philippines' control, such as the Russia-Ukraine conflict, India's ban on rice exportation, and the unpredictability of oil prices in the world market.

In addition, the National Economic and Development Authority (NEDA) reported the rice inflation rate increased from 1.0% in January 2022 to 4.2% in July 2023 due to the rising demand and tight supply in anticipation of El Niño.

According to Marcos, these factors, among others, have caused an alarming increase in the retail prices of the said commodity.