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MANILA, Philippines — The Department of Agriculture (DA) is pinning its hopes for lower rice prices on a maximum suggested retail price (MSRP) for premium grains, believing that making high-class varieties cheaper would also impact regular-milled rice.

During the hearing of the House of Representatives Quinta committee on Wednesday, Agriculture Undersecretary Asis Perez was quizzed by ACT Teachers party-list Rep. France Castro regarding the P58 per kilogram MSRP on premium rice, as the latter believes it has not helped the situation.

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According to Castro, rice prices have already decreased, with premium varieties sold at around P55 per kilogram — lower than the MSRP.  With the MSRP, Castro claimed that the government only allows traders and retailers to sell rice at a higher price, when they would already have profit at P55 per kilogram.

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“We have a well-milled rice that is branded, and then there are different brands, other brands in the markets.  They are priced at P60 to P62 per kilogram.  So what we did is to find how much their capital is, then we add P8 to P12 markup based on the imported landed cost, and that’s the maximum price that we saw,” Perez said.  “‘That was our basis for identifying the P58 price.”

“I think it only created a bigger confusion and some took advantage of it because the prices of rice have decreased, right?  If we peg prices at a maximum suggested retail price of P58 per kilogram, so even if you sourced that cheaper price, you can sell that for P58 right?” Castro asked.

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“I am familiar with the rice you said because we use that sometimes.  But the maximum retail price for that is P55 per kilogram.  That’s why the P58 per kilogram that you set, this only means that a retailer can sell rice for P58 when they can already lower it down to P55,” she added.

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When Castro stressed that the concern of the hearing is regular-milled rice as the masses cannot afford premium rice, Perez explained that the goal of this MSRP is to lower the price of other regular varieties.

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According to Perez, the idea is that if the price difference between premium rice and regular-milled rice is not that big, consumers will pick the better varieties — forcing regular-milled rice traders to lower their prices too.

“Well Mr. Chair we are talking about the common, the regular milled rice.  You are talking about premium rice, the poor people cannot reach that variety.  Premium rice is the one priced at P62 to P64 per kilogram.  That’s why Mr. Chair, if you have a higher target, what we think is you should average that depending on what you saw as a maximum price,” Castro said.

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“If you will allow me to explain, the basis of the MSRP is what you find now in the market as there are rice priced at P60, P62, and P64 per kilogram.  So if you peg a price that would not be above P64 per kilogram, whether that is the highest-priced rice — as you mentioned, the premium grains — then the price of all varieties will go down,” Perez said.

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“Because for example, premium rice is already priced at P58, that’s the most expensive, of course the lower-quality rice’s price would also go down naturally.  Otherwise I would buy a P58 per kilogram premium rice, that’s how the market will play,” he added.

Perez also bared that they are considering setting a price ceiling, which will be in tune with provisions of Republic Act No. 7581 or the Price Act.

“And so at this time because we have no other options, the other options that we considered under the Price Act is to set up probably an […] that’s an MSRP, that’s what we did, but what we did now is a price ceiling, based on unreasonable prices,” Perez said.

“So you’re considering a price ceiling?” quinta committee presiding officer and Albay 2nd District Rep. Joey Salceda asked.

“That is within the provisions of the Price Act,” Perez replied.

Last January 11, Agriculture Secretary Francisco Tiu Laurel Jr. said the government will impose this MSRP P58 per kilo for imported rice.  The MSRP will start on January 20, initially covering Metro Manila.

Laurel said the decision came after “extensive consultations” with industry players as the government attempts to tame increasing rice prices — which have not gone down despite tariff cuts and a drop in global prices.

The MSRP would then be reviewed monthly to consider factors affecting prices.

READ: DA sets imported rice price cap at P58/kg 

During the campaign season for the 2022 national elections, part of President Ferdinand Marcos Jr.’s promise was to bring down rice prices down to the P20 to P30 per kilogram range.

READ: Bongbong Marcos vows to bring down price of rice 

Despite rice prices skyrocketing in the middle of 2023 — which forced the President to impose a price cap on regular and well-milled rice — administration allies and Marcos himself maintains that attaining this goal is still possible.

READ: Marcos formalizes rice tariff cut via EO 62 

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Last September 2024jollibee.bet, House Speaker Ferdinand Martin Romualdez said rice prices had dropped to P42 per kilogram, which he attributed to the interventions made by Marcos, like the reduction in imported rice tariffs to 15 percent.

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