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Economists at the University of Asia and the Pacific cited the
Filipinos’ declining buying power and government’s lack of
support for agriculture as the main culprits for the rice-price
crisis.
The bad weather lately certainly doesn’t help.
Reports said tropical storm “Cosme,” the latest weather
disturbance to hit the country, caused P139-million worth of
damages. The report comes a day after Agriculture department
officials said the impact of the storm on rice harvests was “very
low.”
But the real cause is not the ballooning
population, as some people would argue, according to the study The
Rice Situation: Is there a shortage? by Rolando Dy, an economist at
the University of Asia and the Pacific.
The population is growing 2 percent, compared to
a decade ago when it was 2.3 percent per annum, he said, adding that
the population growth rate is still lower than the country’s rice
production of about 4.1 percent since 2002.
“The primary reason is the low purchasing
power of the masses,” Dy explained.
The peso purchasing power fell six centavos to
P0.65 in April this year from P0.71 in the same period last year,
based on a computation by The Manila Times using data from the
National Statistics Office.
In Metro Manila, the consumers’ buying power
dropped by five centavos to P0.65 in April from P0.70 in the same
period last year. For consumers living outside Metro Manila, the
value of their peso is P0.60 in April, lower by 12 centavos from
P0.72 in the same period last year.
Dy said the total annual per capita rice
consumption has dramatically increased from about 122 kilos five
years ago to 134 kilos today.
He added that the high cost of flour—and in
turn, bread—compels poor consumers’ shift to rice. “Already,
the poor can hardly afford meat, vegetables and other food
alternatives.”
Rice stocks are going to get tight with hoarding
by households and other parties, he said. “Imports will provide
the supplementary supply, but supply will remain tight till
end-September 2008 as exporters and speculators are holding back.”
Dy added that the frequent National Food
Authority announcements of large procurement of rice stocks have
partly contributed to trigger sharp increase in world rice prices.
“Other Asian neighbors, such as Indonesia and Malaysia, are doing
these practically under stealth.”
Cid Terosa, another economist from the same
university, said that although poverty incidence in 2006 has gone
down relative to the poverty incidence in 2000, increasing food
prices will burden the poor more than the rest of society.
In 2006, the country’s poverty incidence
dropped to 26.9 percent from 27.5 percent in 2000.
“Soaring food prices is everyone’s problem,
but it is a greater problem of the poor,” Terosa said.
Terosa estimated that a 10-percent increase in
food and cereal prices would cut income of Filipinos by 4.6 percent
on average.
A 10-percent price increase in food and cereal
prices will cut income of the poorest 30 percent by 5.9 percent and
the income of the upper 70 percent by 3.9 percent.
The average income of Filipinos under poorest 30
percent is P49,000 in 2006. The middle 60 percent earns an average
income of P160,000, and the richest 10 percent, P622,000.
In terms of expenditure, a 10-percent increase
in food and cereal prices will reduce 14.4 percent for Filipinos
under 30 percent and 6.5 percent for upper 70 percent.
Storm damage
“Cosme” destroyed some more than
P139-million worth of agricultural products in Regions 1 and 3 and
in the Cordillera Administrative Region, according to the National
Disaster Coordinating Council. The provinces of Pangasinan and
Zambales were placed under a state of calamity.
Cosme is reported to be outside the Philippine
area of responsibility on Tuesday, but not before leaving 13 people
dead and two still missing. More than 1,300 people remained in
evacuation centers as of Tuesday.
Nearly half a million people were affected by
the storm, which blew off tin roofs, toppled power and
telecommunication lines, the civil defense office said.
The disaster council reported that the
Department of Social Welfare and Development released an initial
P1,038,153 to nongovernment organizations and local government units
to extend help to the storm victims.
The storm damaged more than P41-million worth of
infrastructure and houses. Some 18,262 homes were also destroyed or
damaged in the provinces of La Union, Pangasinan, Zambales and
Benguet, Iloilo, Negros Occidental and Negros Oriental.
Agriculture Secretary Arthur Yap said temporary
delivery disruptions and price movements are expected when tropical
storms hit these regions because 60 percent of the vegetable supply
of Metro Manila comes from Northern Luzon.
However, he said vegetable supply remains stable
at present, and there is no reason for prices to go up in retail
markets.
“Although there may be disruptions in delivery
of one to two days due to the clearing of roads after the typhoon,
this should not be used as an opportunity by retailers to jack up
their prices. That’s already profiteering on their part,” Yap
said.
Yap said his department is now developing areas
in Regions 4-A and 4-B (Southern Tagalog Region) and Central Luzon
as alternative sites for production and delivery in the coming
months for off-season vegetables to guarantee the steady supply of
these food staples in Metro Manila.
He assured there are sufficient rice stocks as
the country heads for the lean months of July to September, saying
the recent typhoon has minimal impact on farms in Pangasinan, a
major producer of palay (unhusked rice).
-- Darwin G. Amojelar, Ira Apanay, Jefferson Antiporda and AFP
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