A buffer stocking mechanism on the sale of agricultural and fisheries products is being eyed by the Department of Agriculture, the first time that the government invokes this provision of the Price Act (Republic Act No. 7581) since the law took effect in 1992.
This was disclosed by the Department of Trade and Industry (DTI) officials following a meeting of the National Price Coordinating Council (NPCC)'s on April 22.
In a press conference in Makati City, DTI Assistant Secretary Amanda Nograles of the Consumer Protection Group (CPG) shared that the DA has proposed the formulation of of implementing rules and regulations (IRR) for the potential buffer stocking system, which will serve as guidelines for its implementation.
Nograles highlighted that this was the first time that the Section 9 provision of the Price Act (Republic Act No. 7581) has been invoked since the Act took effect in 1992.
Section 9 of the Price Act law states that, "the implementing agency may procure, purchase, import, or stockpile any basic necessity or prime commodity, devise ways and means of distributing them for sale at reasonable prices in areas where there is shortage of supply or a need to effect changes in its prevailing price. For any or all of these purposes, a buffer fund shall be allocated in the annual appropriations of the implementing agencies."
DTI Undersecretary Ed Sunico said the DA's proposal involves a 10-day buffer stock, which the NPCC hopes to help stabilize prices.
"They will work with the private sector to ensure that the 10 days worth of inventory has a place to be kept in, whether it's warehousing or cold chain storages, etc," he added.
Nograles clarified that the IRR provides for a maximum of 10 days buffer stock nationwide, but the DA will determine the amount of items to be stocked, since the Philippine Statistics Authority (PSA) told the NPCC that "they do not estimate the daily requirements since it involves stocking food items."
She said that among the products mentioned for the buffer stocking are rice, corn, sugar, onion, pork, and fertilizers. However, she clarified that this is not a definitive list for inclusion in the buffer stock.
In addition to creating a market-based mechanism to decrease the price by increasing the supply, Nograles said this will also become a "deterrent to hoarders and those engaged in illegal price manipulation."
"If we have a buffer stock, they [violators] may think that, the government can intervene anytime," she added.
She noted that this will be different from the buffer stocking policy of the National Food Authority (NFA).
Comments were solicited from the NPCC for the buffer stocking IRR, but "there is still no indication when this will be signed and when it would be made effective," she said.
The timeline for the IRR is deferred to the DA.
Under the General Appropriations Act (GAA) of 2024, there is no buffer stock fund, so the DA will need additional funding. The sources of these funds have not yet been disclosed.