Rice prices from earlier this year (MANILA BULLETIN)

The quinta-committee (quinta-comm) of the House of Representatives has ordered the National Bureau of Investigation (NBI) to investigate the role of middlemen in the alleged manipulation that keeps rice prices high.

Iloilo 1st district Rep. Janette Garin made this motion during the hearing Wednesday, Dec. 11, in a bid to shed light on the individuals and organizations responsible for significant mark-ups in the rice supply chain.

“Mr. Chair, will this august body allow me to put forward a motion to direct the [NBI] to investigate [both ways]—from the retailers to the middleman to the wholesalers, or wholesalers papunta rito sa mga middleman papunta sa mga retailers (to the middlemen to the retailers)—so we can specifically identify the responsible people in terms of price manipulation. I so move, Mr. Chair,” said Garin.

The panel’s overall chair Albay 2nd district Rep. Joey Salceda approved the motion after hearing no objections.

Garin’s appeal followed a presentation by the Philippine Competition Commission (PCC), which outlined vulnerabilities in the rice supply chain, particularly among vertically integrated entities and middlemen.

During her interpellation, Garin pressed Department of Agriculture (DA) Secretary Francisco Tiu Laurel Jr. to clarify which agency was responsible for monitoring middlemen in the rice market.

“There was a chart presented by PCC and they mentioned the vertical aspect itong dito sa wholesaler papunta sa retailer, tila meron doon mga middlemen. ‘Yun po ba, kaninong ahensya ang pag-police ng mga middlemen na iyon?” she asked.

(From the wholesaler to the retailer, apparently there are middlemen there. Is that so, whose agency is policing these middlemen?)

“In my opinion, Mr. Chair, wala (there is none),” Laurel replied.

Acknowledging these regulatory gaps, Garin pointed out that some middlemen exploited their control over access to legitimate wholesalers. She said this further inflated rice prices.

“At ‘yung retailer ay tila hindi nabibigyan ng direct na linya papunta sa totoong wholesaler kasi kontrolado nito ang mga middleman na ito,” she added.

(And the retailer doesn't seem to be given a direct line to the legitimate wholesaler because it controls these middlemen.)

During Wednesday’s hearing, it was revealed that despite the huge tariff reduction (35 percent to 15 percent) that was intended to make rice cheaper, retail prices for the staple remain high. The price ranges from P55 to P60 per kilo.

Government data also showed that tariff reductions have resulted in P13.3 billion in foregone revenues.

Lawmakers suspect that the revenue may have ended up benefiting rice importers and traders instead of lowering retail prices.

With this, Garin urged the NBI to investigate the rice industry akin to its probe into onion price manipulation last year.

She recalled that investigators traced transactions step by step, from wholesalers to retailers, to expose those profiting unjustly.

“Nakita natin ang mga nagtatago dahil iba ang sinasabi ng importer, wholesaler, iba naman ang sinasabi ng farmers’ association. Only to realize na ‘yung nasa gitna na siyang malaki ang kinikita, there was actually a jump of I believe P250 to P300 per kilo profit only net for that specific person and organization na ngayon nga kinakasuhan na ng NBI,” the Iloilo solon said.

(We have seen those who are hiding since the importers, wholesalers say something different, while the farmers' association says something else. Only to realize that the middlemen are the ones who earn the most, there was actually a jump of I believe P250 to P300 per kilo profit only net for that specific person and organization who is now being charged by the NBI.)

The NBI’s upcoming investigation is expected to uncover whether the alleged manipulative practices by middlemen constitute economic sabotage or profiteering.

If either is proven, this would lead to the filing of criminal charges and possibly regulatory reforms.