November 26th, 2024
The 2016-2018 rice price manipulation, which forced us to enact rice tariffication in 2019, remains the single largest incident of mass-scale price manipulation in the country’s recent history. Consumers may have lost as much as P88 billion in 2018, and as much as P163.6 billion in increased consumer prices of rice in total over that period –highway robbery by the privileged few that were allowed to import rice during the period.
The signs of a cartel were there: In 2016 and 2017, the private sector was allowed to dominate the rice import market for the first time since the rice price spike in 2011-2012, and only the second time since 1990. By 2018, most inventories were held by the commercial sector (as much as 89%). At the same time, NFA under Duterte-appointed administrator Jason Aquino abdicated its responsibility to stabilize rice prices by diverting some P5 billion meant for palay procurement towards loan payments. Around the same time, some senators accused NFA officials of accepting bribes in exchange for the ability to corner import permits.
Modus operandi: Imports are cornered. Private stocks are built up. Price is then allowed to rise. It does not take a genius to see that the resulting price crisis was deliberately concocted.
Promises were made that people would go to jail for this. That is why we are following up on the Department of Justice to see whether cases were indeed filed. We can prod the justice system to investigate and prosecute. And we can use our subpoena powers to aid in the buildup of evidence.
But the more important concern for me as a policymaker is this: are the same people who were involved in this mess still in the rice trade? Is there anything we can do to finally break this network down? Is our recent Anti-Agricultural Smuggling Act enough, and how can we implement it better?
I am particularly concerned about deterring this scheme from happening again, because I suspect a good number of those involved are still in the business. Rice prices in the world market are already going down by about 14 percent. Add to that the tariff reduction from 35 percent to 15 percent and landed cost of rice imports should have gone down by as much as 34 percent. But rice retail prices, year-on-year, have gone up by 9 percent. That is impossible without cartel-like behavior.
While prices from July have gone down by 40 cents after the tariff reduction, that is simply not enough. The same bad actors from 2016-2018 are still on the loose, and I suspect they’re still in business.