The country’s antitrust body is looking into possible manipulation of rice prices by unscrupulous groups, possibly working as cartels, keeping the prices of the staple high despite the abundance of supply in the market and the declining farm gate prices.
The Philippine Competition Commission (PCC) said on Wednesday it was forming a technical working group (TWG) with other government agencies to determine if this situation was caused by anticompetitive practices.
The actual members of the TWG have yet to be decided, but the Department of Agriculture will most likely be one of them.
The government has been trying to figure out why retail prices of rice have not gone down to desired levels despite the liberalization of rice importation and the low farm gate prices of the local produce.
The Duterte administration had pushed for the passage of the rice tariffication law when rice prices shot up, driving inflation rate to hit record highs last year.
The law, which replaced the quantitative restrictions on rice imports with tariff, should have made retail prices of the staple more affordable to Filipinos.
While PCC Chair Arsenio Balisacan said certain market observers had reported low prices of palay at the farms but the same could not be said for the rice sold in the market.
Balisacan said in an interview that the TWG would try to determine the root cause of the slow decline, as he noted that the causes of market disruptions had varied in the past, such as typhoons destroying crops and therefore making what were left more expensive.
“The intention of the TWG is to have a better understanding of the situation or the market. Hopefully, with that understanding we can have a clearer, firmer and more focused investigation,” he said.
PCC Commissioner Johannes Benjamin Bernabe deferred from jumping to any conclusion about which specific groups could be blamed for the rice price situation, noting the extensive value chain in agriculture from the farms to retail markets.
“Certainly, the farmers are not in a position to abuse any position they might have. They are not organized. They don’t have any leverage on imposing prices,” he said, adding that they were also looking at retailers right now.
“Primarily, the ones who have leverage in this value chain appear to be the middlemen. At this point, we don’t want to say anyone is liable, that there are any guilty parties. It’s just that in the PCC, it behooves us to try and narrow down who it is we should be prioritizing in terms of examining behavior or conduct,” he added.