Diokno: Econ team backs rice price cap as crucial stop-gap solution to provide immediate relief
The Philippines' economic team reiterates full support and endorsement of the President’s recent decision to impose a price cap on rice while emphasizing the importance of immediately implementing a comprehensive set of measures aimed at securing long-term stability within the rice market.
"Executive Order No. 39 was issued by the President as the chief executive and the concurrent secretary of the Department of Agriculture. EO 39 serves as a lifeline, extending much-needed relief to Filipinos grappling with the high rice prices,” Diokno said in a statement on Monday.
Under EO No. 39, the mandated price of regular milled rice is P 41.00 per kilogram while well-milled rice is at P45.00 per kilogram.
The Finance Secretary emphasized that the economic team views EO 39 as an essential stop-gap measure, and underscored the importance of supplementing it with additional measures to achieve long-term rice price stability in the country.
“We agree with the President that implementing a price cap on rice is the most prudent course of action at the moment to achieve two critical objectives: stabilizing rice prices and extending immediate support to our fellow countrymen," he added.
The imposition of a price cap on rice is geared at addressing non-competitive practices by some market players and discourages hoarding, thereby reducing the price of rice.
Diokno noted that EO 39 can be proven effective in the near term, but should not persist for an extended period.
The Finance chief said the President has directed the economic team to implement measures that will mitigate the negative impact of the price controls on rice retailers and farmers.
The Department of Finance (DOF) has proposed a comprehensive approach, including the temporary reduction of the 35 percent rice import tariff rates, both ASEAN and Most Favored Nation (MFN) rates, to zero percent or a maximum of 10 percent, to arrest the surge in rice prices.
Diokno clarified the importance of encouraging timely rice imports by the private sector. The full implementation of the Super Green Lane, which allows for advance processing and clearance of shipments for the country's top-qualified importers, has also been proposed to expedite rice imports.
“We are advocating cooperation with tollway concessionaires and operators to temporarily exempt trucks catering to agricultural goods from increased toll fees, ensuring the efficient transportation of rice,” Diokno said.
The government also aims to curb non-competitive behavior in the rice industry by actively pursuing cases of hoarding, smuggling, and economic sabotage. Secretary Diokno said that there should also be strict monitoring of the prices of imported rice throughout the logistics chain.
The President has directed the DA and the Department of Trade and Industry (DTI) to monitor rice prices by making rounds in markets and storage facilities.
The Inter-agency Committee on Inflation and Market Outlook (IAC-IMO), which the DOF co-chairs, will continue to monitor developments in food and non-food inflation in order to effectively identify the measures needed to mitigate inflationary pressures. DOF Communications Group
