Rice prices soar due to Aquino govt bungling

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The price of rice, the Filipino staple food, has soared to P42.50 per kilo, a level seen only during periods of crisis for global rice and other commodities.

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The P40/kilo level was last breached in 2008-2009 and earlier, in 1972-1973. But that was because of a global commodity crisis not only for rice, but all agricultural products. It was in turn caused by an oil price surge and the ensuing market panic. No government in the world would dare risk shortfalls in their country’s staple food, so they worsened the situation then by restricting their rice exports.

In the present case, though, it is sheer bungling by the administration of President Aquino. He has claimed, and the yellow media has duly reported, that the Philippines has achieved self-sufficiency in rice.

Aquino’s favorite punching bag, former President Arroyo saw rice prices increase in 2008-2009 because of the global commodity crisis. However, prices of the staple during President Arroyo’s term averaged P34.20 per kilo. The P42.50 per kilo of rice under Aquino today means a huge 25 percent increase.

Aquino’s appointee, National Food Authority administrator Lito Banayo in 2011 had even claimed that the previous government had “foolishly” imported so much rice and made allegations of corruption that he couldn’t prove.

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(Retail prices as adjusted to May 2014 prices)

What Banayo of course didn’t mention—or couldn’t comprehend—was that the global rice crisis erupted starting late 2007, and without imports, the Philippine domestic market would have seen a massive shortage.

Aquino’s officials were mesmerized into believing that rice production was better than reflected in statistics since rice prices were in fact stable, and even falling.

What these dunces didn’t realize was that there was massive smuggling of rice from Vietnam and Thailand, that in one celebrated case, the rice shipment of an entire ship disappeared after docking in the Batangas port and leaving for Cebu.

In December 2012, I wrote a column at the Philippine Daily Inquirer entitled, “Rice smuggling explodes under Aquino”, in which my analysis of the International Monetary Fund’s trade figures showed that smuggled rice from Thailand could have reached a staggering P16 billion in Aquino’s two years in office.

Then Bureau of Customs head Ruffy Biazon denied my claims, with his successor though later filing a barrage of criminal charges against those he identified as the notorious rice smugglers.

Aquino’s agriculture officials did not realize what would happen if the Bureau of Customs finally found their balls and started cracking down on rice smugglers. Naturally, the supply decreased and the idiots at the National Food Authority had not started negotiations for rice purchases.

In the meantime, the US Department of Agriculture—known for its very accurate estimates of the supply of agricultural products around the world—had released its regular reports in which one table showed that contrary to Aquino’s claims of self-sufficiency, the Philippines would have to import 2 million tons this year. This is nearly double the 1.1 million metric tons imported last year and 600,000 more than the government announced it would import this year.

International traders of course knew what that meant: it’s a suppliers’ market for the Philippines, and they could bid up their prices. As a result, the NFA has been struggling to order rice at such high prices and which can only result in the P42/kilo levels that we are seeing at the local market right now.

The website www.oryza.com (“oryza,” the Greek word for rice is the botanical term for rice) of the world’s rice market, in its article dated June 5, called the global industry’s attention to our quagmire:

“A study by the Philippine Institute for Development Studies (PIDS) found that a decline in official rice imports led to a surge in rice prices during 2013, not price manipulation by rice cartels. However, rice smuggling in the Philippines continues to run rampant thanks to the huge difference in global rice prices and local rice prices, and a reduction in official imports under the nation’s rice self­sufficiency efforts.”

While the Philippines tried to reduce imports in hopes of boosting local production, the result was smuggled rice imports AND higher prices.

PIDS researchers said the average domestic prices of milled rice increased to P34.16 per kilogram (around $764 per ton) in December 2013, up about 15 percent from P29.81 per kilogram (around $664 per ton) in January 2013, based on data from the Philippine Bureau of Agricultural Statistics (BAS).

Over the same period, the Oryza White Rice Index fell about 5 percent from about $475 per ton FOB in January 2013 to about $450 per ton in December 2013.

The National Food Authority (NFA) imported only 205,700 tons in 2013, down about 76 percent from about 843,700 tons imported in 2012 due to the rice “self-­sufficiency program” initiated by the government. The program aimed at 100 percent self­ sufficiency in rice production in 2013.

Reduced imports and natural calamities put further upward pressure on Philippine rice prices.

Trade sources said unofficial imports reached a staggering 1 million tons in 2013. The surge in prices and rampant smuggling led the government to reconsider its decision on reducing rice imports in 2014.

The NFA will be importing 800,000 tons of rice from Vietnam between May and August 2014 to maintain buffer stocks and control price hikes. However, Vietnam rice exporters are reluctant to fulfill the tender as Vietnam rice prices rose after the tender was announced.

USDA estimated the Philippines will import around 2 million tons of rice in 2014, including unofficial imports, while the UN’s Food and Agricultural Organization (FAO) estimated it will import around 1.2 million tons.”

The Aquino government’s handling of the rice industry is ineptness of a criminal magnitude. For the poorest, rice is basically what keeps them alive, and surveys show that it accounts for 30 to 50 percent of what they spend.

Yet the bungling by Aquino and his officials have increased the cost of rice, for the average Filipino, by 20 percent from its average cost since 1972.

tiglao.manilatimes@gmail.com
FB: Rigoberto D. Tiglao www.rigobertotiglao.com

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22 Comments

  1. Alejo Rosete on

    I only read the Manila Times Columnist, specially Ambassador Tiglao’s column – very
    credible and inspiring to read make my response, except for one Columnist who serve and close to President Cory Aquino’s Administration. All of them are credible except one.

  2. When Filipinos go hungry – they will become desperate so
    PNoy better watch out !! Can you imagine – the rice and garlic
    prices are skyrocketing like never before and since 4 years
    ago – since PNoy took office – the “cocolisap” – the insect
    pest destroying coconut trees and other plants already
    existed but the PNoy Administration did not pay attention to this
    problem as early as 4 years ago – they did nothing and now
    millions of coconut trees are dying – they are turning “yellow”
    like PNoy’s yellow administration. What is this PNoy Admin doing??
    We are having all sorts of crisis – food crisis including, so God help us.
    We can not afford another 2 years of PNoy and his allies !!

  3. Bernardo Carpio on

    Madali lang talaga pa-ikutin ang Masang Pilipino o kahit anong masa na ibang bansa.
    In 2010 the scalawags of the Aquino-Cojuangco Clan have taken over the country through deceit and chicanery with approval of uncle sam. The elite in our country from the hacienderos of the spanish times until today just take turns raping the country over and over again. With their angkan doing the same for generations.
    Kailan pa tayo mamulat sa tunay na buhay ng bansang Pilipinas ?

  4. I am an American married to a lovely Pinay and have plans to retire in your lovely country. I am only shocked by the way your government takes care of your people by constantly abusing them financially every chance they get, rice schemes, bureaucratic red tape in accomplishing simple tasks dealing with the government from the smallest local provinces to the federal government. It seems that getting into an office position at all levels of government is like hitting the lottery jackpot and you start cashing in when you are in office to line your pockets and your friends and family with no consequences. I will never forget when I was vacationing and traveling through Cebu and in a small town got a chance to meet the mayor and his staff. It seems that all they wanted to do was rent me one of their apartments or houses. They seemed to have all the money and power while the majority of their people were dirt poor. Their roads and infrastructure were a mess but they seemed to have plenty of money. The people have to stand up and get ready to do some action and clear out all government officials from the top down and start with a new slate of officials that are not corrupt. It sounds simple but that is the only way to turn your country around. Seems like an impossible task unfortunately. Good luck you deserve better.

  5. I stopped reading PDI, my papers are Manila Times and Tribune. PDI is full of yelow turds. That thick faced four eyed Quiroz is the numbe one arse licker of Pnoy. I read Mr Tiglao column in the Morning and again at night. Also Mr Makabenta. All Manila times columnist are tops in my book.

  6. It was always said on TV’s that we have enough supply of rice for the whole year, yes we have enough supply but at a higher price. This morning , a suggestion was made by a Pnoy lapdog that in order not to depend on this expensive rice, we should eat other alternatives like camote or corn.If am just beside this guy who made that comment I already put a big raw camote on his mouth.

  7. Johnny Ramos on

    It was not really poor planning on the part of pnoy but an ulterior motive to accumulate more monies in his personal disposal for election and after his term. Pnoy will spending a lot for lawyer after 2016. Rice smuggling is most profitable to acquire wealth. My estimate is about a billion peso a month net to relatives. The best part of it this d raw Ito ninakaw sa pera ng govt. Pnoy is very clever in manipulating our minds by playing dumb he becomes blameless. Only his cabinet are taking the heat in corruption.

  8. Lord Chimera on

    At this rate our livestock industry (pigs, cow, etc) will also be on the mismanage by one of BSA’s “favorites”.

  9. anima dont be so stupid, why do you people keep thinking god can help you. Go to the tallest building & jump off & pray on your way down for god to save you. Or catch a ship & when its half way across the pacific jump overboard without anyone noticing you & ask god to help you. People who get saved in extremly dangerous situations eiher did something right to save themselves or had a stroke of luck. It has nothing to do with od. Look at this truck drivers in iraq that was murdered the other day, why didnt god save them as they were just hard working men looking after their families.
    Now you are right again rigoberto, from pnoy to all the officials here they are all useless. They cant even get a disck sorted for putting on your car every year when you re register it. How do you expect them to sort something out that in real terms is quite diffitult.

  10. Jose Dela Victoria on

    I did not believe my chinese friend who told me sometime in January that the government’s “going after the smuggler” will cause massive rice shortage. I at first confident that Pinoy and his rice cabinet are anticipating this.
    It’s sad to note that “Noynoying” seems to show a serious effect to us once more.
    Mr. President we want to follow your “tuwid na daan” but paano kung patay na ang kabayo dahil wala nang “rice” (pagkain).
    Wake up, move, walk, run!

  11. Anima A. Agrava on

    If the Filipino people, and the Philippine Congress were patriotic Filipinos, persons who fear that God will mmake them pay for their crimes against the poor and destitute, this criminal incompetence and dereliction of duty of President Aquino and his beloved friends in the Cabinet should ,ale them IMPEACH PRES. AQUINO.

    Unfortunately, the majority of the congressmen are unpatriotic atheists at heart. They love only themselves. And they fear only Aquino and his gang.

    • sancho alconce on

      I am an athiest and it is rather absurd and superstitious that a supernatural being is tasked to be the punisher of those that committed crimes against humanity. It ain’t gonna happen my dear and surely not after they die and have another life again.It is us who should punish them if they are found guilty in a court of law. As an athiest, I value and respect humanity and the nature that surrounds it. Much more not being unpatriotic.

    • Bernardo Carpio on

      Dahil masyado tayong naniniwala sa “miracles’ ayan pati trabaho natin binibigay natin sa Diyos.
      “Sa Diyos ang Awa sa Tao ang Gawa”

  12. Samuel Santos on

    BTW, did you “leave” the Philippine Daily Inquirer or did they “fire” you? Just wondering. No offense meant.

    • Let me try to answer that if I may. Tiglao quit when he realized he was writing for a yellow broadsheet. LOL

    • Big possibility that the PDI, being a yellow newspaper and apologist felt that Mr. Tiglao was too anti-PNoy which make the owners uncomfortable. They could have made attempts to make Tiglao tone down his columns which possibly PNoy called the attention of the Prietos that Tiglao’s columns bites a lot. PDI like columnists like Quiros, Neil Cruz, Nery and all those pro-Pnoy columnists. It is really very difficult for a columnist or writer being controlled.

  13. ATTENTION ALL KING PNOY SPOKESPERSONS, YELLOW ALLIES AND YELLOW FANATICS AND DEFENDERS, YOU HAVE ALL THE TIME AND SPACE TO REBUTT MR. TIGLAO’S ARTICLE TODAY. BUT PLEASE, NO MOTHERHOOD STATEMENTS. REBUTT POINT BY POINT. This is also a challenge to the fanatic yellow blotters who are always defending and praising King Pnoy and his administration to high heavens.

    • It’s hard to rebut Tiglao’s piece. Stats are well documented and can stand scrutiny.