The economic team of President Marcos was caught off guard when the announcement of a price ceiling on rice was made public on Aug. 31, a Cabinet official confirmed.

While in Tokyo for meetings with Japanese ministers, Finance Secretary Benjamin E. Diokno disclosed that the economic managers were taken by surprise upon learning about Executive Order No. 39, which set price ceilings on regular and well-milled rice starting Sept. 5.

Seated next to National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan, Diokno recounted the moment they heard the news.

“Nasa Japan kami talaga when it was announced. Nasa Japan kami,” Diokno admitted. 

(We were really in Japan when it was announced. We were in Japan)

“Magkatabi kami ni Arsi [Balisacan]. We were talking with the Japanese ministers. Nagulat nga kami, lumabas sa ano diba,” said Diokno, while pointng at his mobile phone.

(Arsi and I were actually sitting next to each other. We were in the midst of discussions with the Japanese ministers when, to our surprise, the announcement came out)

“What?!” exclaimed the finance chief, recalling their initial reaction upon learning the president’s order. 

EO 39 has caused controversy because it goes against the law of supply and demand in economics. 

Price ceilings are meant to ensure access to rice, but economists argued that they can actually make it harder to get the staple food. That is because the government-enforced price does not match the actual market forces of supply and demand.

The EO has set price limits of P41 per kilo for regular milled rice and P45 per kilo for well-milled rice, while there are no limits in place for special and premium rice.

On the first day of implementation, local well-milled rice was being sold for prices ranging from P45 to P53 per kilo, while regular milled rice was priced between P41 and P52 per kilo. 

Imported commercial rice, on the other hand, was priced at P45 per kilo for well-milled and P43 per kilo for regular milled rice.

Diokno said it was only upon their return to Manila that Balisacan had the opportunity to brief President Marcos about the potential impact of his price control measures.

“But parang justification naman ni Presidente is, kasi under ideal market conditon, hindi talaga mag wowork yung price control, pero sabi nya hindi naman talaga ideal, may mga hoarding here and there,” Diokno said.

(But the President's justification is that, in an ideal market condition, price control wouldn't really work. However, he also acknowledged that the situation is not ideal and there are instances of hoarding here and there.)

Last Sept. 3, the NEDA said the price ceilings for rice would be a temporary measure.

“We are confident that the imposition of a price ceiling is only a temporary measure. We expect the rice harvest to commence soon and anticipate that other initiatives will produce the desired result,” the NEDA said.

Diokno had also defended President Marcos' order, stating that EO 39 is intended to manage the upward pressures on rice prices.

“Price controls on rice through EO No. 39 serve as a short-term measure against non-competitive practices by some market players,” Diokno said.

“Price controls, when carefully calibrated and closely implemented, are effective in the near term,” he assured.