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REPASO 2018: Rice, Inflation and Duterte’s TRAIN Law

by Marje Pelayo   |   Posted on Monday, December 31st, 2018

 

The Philippines is among countries that highly depends on rice as its staple.

This year, issues surrounding the country’s rice supply and the National Food Authority (NFA) made headlines especially when supply of low-priced rice became scarce in local markets.

The NFA blamed the NFA Council for the shortage of NFA rice in markets citing its disapproval of rice importation despite the NFA’s recommendation in 2017.

While the NFA rice ran scarce, the price of commercial rice skyrocketed.

In Zamboanga, rice prices hit a staggering P70 per kilogram.

The Department of Agriculture (DA) blamed rice traders for manipulating market prices taking advantage of the scarcity of NFA rice.

But Secretary Manny Piñol said rice supply was not scarce.

It’s just that traders were controlling the supply.

In fact, the DA discovered thousands of sacks of rice in a warehouse in Bulacan supposedly delivered to local markets.

The issue prompted President Rodrigo Duterte to return the control over the NFA to the DA and appointed Sec. Piñol as chairman of the NFA Council.

Duterte ordered Piñol to fill the markets with commercial rice.

“The best way to address this problem is, I will fill my inventory. I was mad because it was either half full or half empty. Sabi ko guys, I want the rice up there, touching the ceiling of warehouse now,” President Duterte said.

In August, the delivery of five million sacks of rice imported by the NFA arrived in the country.

But the prolonged days of rain delayed the unloading of the rice shipment.

Reports surfaced that the rice shipment were infested by rice weevils and could be harmful for consumption.

But Sec. Piñol himself proved that weevil infestation was not enough reason to say that the shipments were no longer edible.

This sets this year “Bukbok challenge” among government officials and the Secretary himself ate weevil-infected cooked rice to challenge lawmakers criticizing the DA.

 

Amid speculations of health risks posed by weevils and alleged formalin contamination in galunggong, Agriculture Secretary Manny Piñol ate cooked weevil-infested rice together with fried galunggong  on live television to allay fears.

“Kanin na may bukbok, pwedeng kainin. I’m walking the talk, kapag sinabi kong kaya kong kainin yung bigas na may bukbok, hugasan lang natin, huwag nating kainin ‘yung bukbok,” Se. Piñol said showing on live television that eating weevil-infested rice is safe.

In November, the DA imposed a suggested retail price on commercial rice and banned the use of fancy brand names.

But the DA expressed concern on the impending approval of the proposed Rice Tarrification Act.

Piñol said the proposed law might remove the supply of NFA rice in markets because the measure will strip the NFA of its importation function and importation of rice will be open even to the private sector.

The NFA’s function will also be limited to buffer stocking and they will only be allowed to buy rice from the local farmers’ yield.

“But one thing is certain, there will be no more P27 rice,” Piñol argued.

But Senate Food and Agriculture Committee chair Senator Cynthia Villar countered Piñol’s statement saying the supply of low-priced rice will remain in local markets.

The price of fish and vegetables also hit significant increase this year due to a series of weather disturbances.

A notable increase was in the price of chili which reached to P1,000 per kilogram.

The DA argued, however,  that the country has enough supply of vegetables but the problem is how they will be delivered to the municipality in need.

In line with this, the DA launched the ‘Tienda Malasakit Stores’ which sell top quality agricultural products at the price almost 50% off.

Also, the DA imposed suggested retail price on several agriculture products to avoid profiteering.

Due to a series of price hikes, the country’s inflation rate shoots up.

Based on the report of the National Economic and Development Authority (NEDA), the country’s inflation reached the 3.5 mark in 2017 but soared even higher in October 2018 at 6.7.

This development burdened consumers even more.

“Kahit sa gulay dati makabili ka lang ng P10 marami na. sa ngayon konti nalang ang mabili mo kahit sa P10 halos wala ka nang makain sa sampung piso,” said Quezon City resident Sicel Amadeo.

“Minsan di nalang kami bumibili. Tsaga nalang kami sa bagoong… eto yan lang ho. Totoo po lahat. Tulad nyan walang trabaho minsan. Hindi ko na alam kung saan ako lalapit,” said Laura Bagan also a resident of Quezon City.

Among the reasons for the rising inflation, analysts said, was the increase in oil price in the world market.

This prompted a fare hike of minimum fare in jeepney to P10.00 in Metro Manila, Region 3 and other provinces.

But after a week, the minimum fare was reduced to P9.00 as a result of a slight oil price rollback.

Price cuts on oil products were recorded eight times in eight weeks from October to November but drivers and operators argued that these couldn’t surpass the total increase in oil prices this year.

Also among the main reasons for the rising inflation, consumers alleged, was the implementation of the Duterte administration’s Tax Reform for Acceleration and Inclusion (TRAIN) Law which the President signed on December 19, 2017.

The measure aims at funding the government’s ‘Build, build, build’ infrastructure projects through imposition of additional taxes.

During the last quarter of the year, the government’s economic managers recommended the implementation of the second tranche of the TRAIN law after the price of oil soared to P42/L.

But the recommendation was later withdrawn after a series of price rollback in oil which dipped by P12/L in total.

The second tranche of excise tax on oil will add P2.00 more per liter.

This prompted the consumer group ‘Laban Konsyumer’ to ask the Supreme Court to suspend the implementation to TRAIN 2 as it will further burden the consumers.

“Pinapabalewala namin ang batas na iyan, sa tingin po namin ito po’y anti-poor. Anti-poor kasi tinaasan ang excise taxes sa fuel at iba pang produkto tulad ng coal sa mga consumer o mga mahihirap na wala namang kakayahan magbayad ng mataas na buwis,” argued Laban Konsyumer Atty. Vic Dimagiba. – Marje Pelayo (with reports from Rey Pelayo)

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Rice traders push for stronger measure vs rice cartels, smuggling

by UNTV News   |   Posted on Tuesday, February 26th, 2019

METRO MANILA, Philippines – Alyansa ng Industriyang Bigas, a group of rice traders are appealing for a strong measure against rice cartels and smuggling to be included in the implementing Rules and Regulation that is being crafted for the Rice Tariffication Law.

Its founding chairman, Robert Hernandez, said that the illegal activities usually cause rice prices to increase in the market.

“Itong mga smuggler, itapon lang nila ang P200, may kita sila P150 sa P1,000, masaya na sila. Malaking kita na yan sa rice businesses. The government will do something. Included sa IRR measures how to eradicate those smugglers,” he said.

Hernandez added that, aside from the measures that the government will impose to help the local farmers, it must also monitor the cost that the retailers group will charge on top of the suggested retail price.

Under the Rice Tariffication Law, the 24-year implementation of the quantitative restriction on rice imporation has been replaced by a 35% tariff on rice importation from within ASEAN private traders.

This new system may result in the inflow of cheaper rice in the market, and the NFA rice will eventually be eliminated.

It will be recalled that one of the most significant issues raised before was the monopoly on rice supply wherein the name of Davidson Bangayan, was floated as a suspected big time rice smuggler.

The Department of Justice released a resolution in November 2018, and filed charges against Bangayan.

However, with the new tariffication law on rice, 10 billion pesos will be annually allocated to the Rice Competitive Enhancement Fund.

This will directly help the Flipino farmers in improving the volume of their harvest.

Pres. Rodrigo Duterte signed into law the Rice Tariffication Law or the Republic Act. No. 11203 on February 04, 2019 and it is expected to be imposed on March 05, 2019. – Freema Salonga-Gloria (with reports from Nel Maribojoc)

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Consumer group worries of TRAIN 2 despite new discounts, subsidies in 2019

by Marje Pelayo   |   Posted on Tuesday, December 25th, 2018

 

MANILA, Philippines – Discounts in prices of prescription medicines are expected starting January 1, 2019 according to the provisions of the Tax Reform for Acceleration and Inclusion (TRAIN) law.

“Dito po sa TRAIN 1 na ito effective January 1, kapag ikaw ay may medical prescription sa gamot ng diabetes, hypertension, at mataas na cholesterol, kailangan less 12% VAT na ang babayaran niyo,” explained Laban Konsyumer President Atty. Vic Dimagiba.

But despite the expected discounts and subsidies offered under the new legislation, the group remains in opposition to its implementation.

Dimagiba claims TRAIN Law as anti-poor because it contributes to the rise of inflation or the spike in prices of basic commodities to include oil products.

Oil players are expected to add at least P2.00 per liter of oil in accordance to the second tranche of excise tax on fuel.

“Ito pong lahat na ito na ginawa ng TRAIN 1, (kung) titingnan ninyo po, mas maraming ginawang perwisyo lalo na doon sa 30% na tinatawag pong mahihirap na consumer dito po sa Pilipinas,” Dimagiba argued.

He also noted that the government still owes part of the fuel subsidy to drivers and operators under the Pantawid Pasada Program.

According to transport group Pasang Masda, around 10% of jeepney operators are yet to receive the P5,000 fuel subsidy.

This is because they are still waiting for the refurbished units to be registered under their respective names.

“For those operators who did not get their card siguro dapat pagbigayan parin natin sila ay mga legitimate operator din na kagaya ko,” said Obet Martin of Pasang Masda.

Meanwhile, the Laban Konsyumer also noted that all 10 million beneficiaries identified by the Department of Social Welfare and Development (DSWD) will get P300 pesos per month instead of the previous P200.

The group added that they, the beneficiaries, must be given 10% discount when buying the NFA rice as well when riding public transport.

The government earlier announced that it is continuously providing aid to sectors affected by the implementation of the TRAIN Law.

As of this writing, the group’s petition to stop the law’s implementation remained stalled in the Supreme Court (SC). – Marje Pelayo (with reports from Rey Pelayo)

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Consumers appeal for continuous supply of NFA rice as rice tariffication looms

by Marje Pelayo   |   Posted on Wednesday, December 19th, 2018

 

NFA rice

MANILA, Philippines –  Consumers are asking the government to retain the supply of the low-priced rice of the National Food Authority (NFA) in local markets even after the passage of the proposed Rice Traffication Act.

Housewife, Carmencita Aceri, said her household consumes up to 84 kilograms of rice a month.

The prevailing retail price of regular-milled rice in Metro Manila markets nowadays is P39/kg, according to data from the Philippine Statistics Authority (PSA).

Carmencita said, buying NFA rice at P27 per kilogram helps her save P12 a kilogram or a clear P1,000 big savings for her tight budget in a month.

“Ang matitipid mo dito pwede narin iyon ang ipambili mo ng ulam kahit itlog,” she said.

Alan Pabustan, also a patron of NFA rice, shares the same sentiment as Carmencita and other patrons of low-priced NFA rice.

“Malaking kawalan din. Kumbaga malakin tulong din sa amin ang NFA (rice) siyempre mura,” he said.

“Mahirap po ang budget ngayon sa ganitong nangangalakal lang po ang nanay ko. Medyo kapos po pagka tumaas (ang presyo)” expressed another rice consumer Jea Estomata.

On Tuesday (December 19), the Department of Agriculture (DA) expressed concern over the possible removal of NFA rice in local markets once the proposed Rice Tariffication Act is enacted into law.

Under the proposed legislation, the NFA’s regulatory and importation power will be removed and the agency’s function will only be limited to buffer-stocking.

Also, the agency will no longer import rice and it will only buy the local farmers’ yield.

But according to the agriculture group Samahang Industriya ng Agrikultura (SINAG), the NFA can still supply rice to local markets even without the subsidy coming from the government.

“Ang explanation ng NEDA sa amin doon sa Senate hearing sa Committee on Agriculture ang presyo ng palay kung totoo dahil doon sa importation magiging P17/kg pwede paring magbenta ng P27/kg na bigas,” said Rosendo So of SINAG.

The proposed Act also provides P10 billion fund for farmers’ subsidy which can be used to help lower production cost while increasing farmers’ yield.

But a consumer group argued that farmers cannot hold on yet to the rice subsidy plan because the government has no existing fund for the program.

“Nabasa ko ang final bill na na-approved ng bicam. Walang namang sinabing aabonohan ng gobyerno ang P10B. Ang intindi ko kukunin pa iyang P10B doon sa mga buwis ng mga importer,” Atty. Vic Dimagiba of Laban Konsyumer said.

Meanwhile, the proposed Rice Tariffication Act is just awaiting the signature of President Rodrigo Duterte.

Presidential Spokesperon Salvador Panelo believes that once the bill becomes a law, consumers can expect much lower price of rice in the market.

“Kapag ni-liberalized mo naman, magkakaroon ng competition in the market so magpapapabaan sila ng presyo. Otherwise, hindi sila mabibili kaya nga law of supply and demand iyan,” Panelo concluded. – Marje Pelayo (with reports from Rey Pelayo)

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