The government will start regulating rice prices before the end of this month as part of efforts to address rising inflation.
The Department of Agriculture, the National Food Authority and the Department of Trade and Industry have jointly agreed to restrict the labeling of rice variants in the market into four and imposing suggested retail prices (SRP) on each variety, Agriculture Secretary Emmanuel Piñol told reporters on Monday.
This means that rice being sold in retail outlets will be limited to four kinds, namely imported rice, regular local rice, well-milled rice and whole grain rice. Special or fancy rice varieties such as the Jasmine and Japanese, however, will not be regulated.
While the three agencies have yet to agree on the price range, Piñol said they were looking to sell imported rice at P38 a kilo, regular local rice at P39 a kilo, well-milled rice at P42 a kilo and whole grain rice at P44 a kilo. The SRP will be reviewed every two weeks.
Traders and retailers who sell beyond the 10-percent margin allowed on the SRP face a jail term of five to 15 years and fines of up to P1 million, Piñol said, quoting the Price Act of 1992.
Eventually, the government is looking to create a new policy that will impose rice packaging in markets to avoid overpricing and underweighing of the staple.
Slated to be implemented by the middle of 2019, this is expected to stop the sale of rice in open stalls to ensure traceability and food safety of consumers. It will complement the agency’s plan to classify rice into four kinds.
The escalating prices of rice have greatly contributed to the acceleration of the country’s inflation rate, which reached a nine-year high of 6.7 percent in September.
Average prices of regular-milled and well-milled rice hit their highest levels this year.
According to the price monitoring report of the Philippine Statistics Authority, as of the last week of September, price of regular-milled rice declined by 20 centavos, or 0.07 percent to P45.83 a kilo from a week ago.
Although minimal, this was the first time that the price of the rice variant slid since January. However, compared to year-ago levels, this was still higher by 20.45 percent.
As for well-milled rice, its average retail price continued to rise at P49.37 a kilo, up 16.80 percent from the same period last year.
The government is undertaking other measures to bring down food prices. For rice, it is removing the import quota and instead slapping a 35-percent tariff on the staple to bring down prices.
Analysts noted that one of the key drivers of rising inflation has been the jump in rice prices, which has been caused by supply shortages. Replacing the current system of rice import quotas with a tariff regime is expected to help bring down retail prices.
The Bangko Sentral ng Pilipinas estimated that rice tariffication would cut 0.4 percentage point from headline inflation.