According to National Economic and Development Authority (NEDA) Karl Kendrick Chua, the campaign promise of leading presidential contender Ferdinand Marcos Jr. to reduce retail rice prices to P20 to P30 per kilo is feasible.
“If our support to our rice farmers are very targeted and efficient, then I think that is a possibility,” said Chua, the Socioeconomic Planning Secretary.
Marcos Jr. stated that his administration would recommend a rice price cap and require government entities to act as middlemen in harvest procurement.
It will reduce rice prices from P38 to P50 per kilogram for local commercial rice in Metro Manila and P37.00 to P52.00 for imported commercial rice to P20 to P30.
Under a liberalized trade framework, according to Chua, bringing the retail price of rice to the level promised by Marcos Jr. is doable under the Rice Tariffication law.
The Rice Tariffication Act permitted rice to be imported without restriction, albeit at a higher tax. The law attempts to cut rice prices by flooding the market with imports.
The law established the P10 billion Rice Competitiveness Enhancement Fund (RCEF) to protect the local sector. It would provide incentives to farmers for farm mechanization equipment.
P20 per kilo rice possible – NEDA chief
“Under Rice Tariffication, the programs are expected to increase the yield per hectare from four metric tons to five or six metric tons, so that is possible actually,” Chua said.
According to data from the Department of Agriculture, the country has had record harvests of 19.2 million metric tons in 2020 and 19.96 million metric tons in 2021, respectively, following the enactment of the Rice Tariffication law.
On the other hand, NEDA chief Chua believes that if farmers are given subsidies that are not tied to outcomes, the goal of lowering rice prices from P20 to P30 per kilo “might be a problem.”
“If we are going to use taxpayers’ money solely to subsidize without conditions and without any productivity measures, then that’s a bad idea,” the NEDA chief said.
“By removing quantitative restrictions, we were able to address both the needs of consumers for lower retail price of rice and use the funding from the tariff, which I believe was at P18 billion last year to fully fund the RCEF or Rice Competitiveness Enhancement Fund,” Chua said.
“Those calling for the removal of the RTL risks taking away P18 [billion] we are giving to farmers to improve their productivity,” the NEDA official said.
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