From the Newsrooms: Retailers, economists hit rice price cap

A rundown of key events and issues covered by newsrooms from September 4 to 10, 2023

THE MARCOS administration seems to have gotten snagged by its economic policies as the private sector and academe pounced on the president’s decision to cap rice prices, so soon after the same informed community criticized the Maharlika Investment Fund. The president’s announcement of a price ceiling failed to consider the immediate negative impact on rice retailers, which rice economists said would cascade quickly to consumers. 

Executive Order 39 set the price of regular-milled rice to PHP 41 pesos per kilo and well-milled rice to PHP 45 kilo. Announced on August 31, the order was scheduled to take effect on September 5 to immediately arrest surging rice prices. Retailers were quick to complain about income loss because they had already bought their inventories – all of which media included in news accounts. 

Media reported long lines in rice stores on September 5, with some consumers trying to buy more than needed for fear of stocks going out. Some retailers, meanwhile, chose to close down shop while waiting for cheaper stocks from their suppliers. Having no choice but to comply, retailers asked for government subsidies to augment their losses. 

This was the exact scenario that economists feared and wrote in opinion pieces last week. Boo Chanco, Winnie Monsod, JC Punongbayan, Sonny Africa and Cielito Habito were among those who criticized the price ceiling policy, raising the basic economic concept of the law of supply and demand, and the fact that both farmers and retailers would incur enormous losses that they might stop planting and selling altogether.

Price caps are always a dicey move. Once again, Ferdinand Marcos Jr., has given the public reason to question his leadership, on top of the concern about his keeping his post as agriculture secretary.

On the news pages however, coverage carried government assurances that the price cap is only temporary, and that small retailers who will receive PHP15,000 in subsidy have already been identified. News coverage failed to discuss the sustainability of subsidies. 

News held back in making more prominent the expressed concerns of economists. TV Patrol report included the insight of Punongbayan , but only around the middle of the story. Domini Velasquez, chief economist of China Bank, expressed agreement with economists mentioned above. But The Manila Times put the article citing Velasquez in its business pages, not its main section.

A Rappler report, meanwhile, headlined National Scientist and economist Raul Fabella’s view that that the price ceiling may buy the government some time to solve rice supply issues, but political remedies only end up exacerbating the problem to the point that it turns “cancerous.” Notably, Fabella was also a vocal Maharlika fund critic, describing it as “beyond repair.” 

Without being asked by reporters, Presidential cousin and House Speaker Martin Romualdez expansively claimed on September 7 — a mere two days after the ceiling order — that the price cap in the country contributed to the 21 percent price drop in the world rice market.  

More news showed the lack of internal coordination on such a paramount issue as rice. Media reported that Finance Undersecretary Cielo Magno was forced to resign following her public post on the law of supply and demand. Executive Secretary Lucas Bersamin later said in a statement that Magno “has been against the policies” of the Marcos administration since the beginning. But as the think tank Action for Economic Reform told the Philippine Daily Inquirer, Magno is “a reformer with technical expertise who can reach out to sectors with varying persuasions,” and that Bersamin’s allegations were “baseless and unfair.”

Even more telling, Finance Secretary Benjamin Diokno told finance reporters in a September 8 briefing that President Marcos’ economic team was not consulted on the implementation of the rice price cap, saying he and Socioeconomic Planning Secretary Arsenio Balisacan were surprised by the announcement. Both were in a high-level meeting in Japan at the time. And yet, Diokno still backed the president’s decision.

The issue of rice should have been tackled as news, with accounts that analyzed the economics involved. Critical views and perspectives should not be kept only to op-ed sections written as columnists’ “opinion.” Policy news should be treated journalistically in accounts that present facts and analysis. 

Obviously, the standard report based on “he-said, she said” fails to give more basic information about the facts of rice and the costs involved. It is not for lack of experts who have knowledge about the subject. Journalists should just be willing to find other sources apart from the limited official lines approved by the Palace.

Newsrooms also tracked other developments:

1. The Philippine Coast Guard and the Armed Forces of the Philippines reported another successful resupply mission to our troops in the West Philippine Sea last September 8. But the threat of Chinese vessels remain. 24 Oras’ September 10 report featured fisherfolk who said they still could not fish in Bajo de Masinloc (Scarborough Shoal) west of Zambales.

2. On the Human Rights front: Two anti-reclamation activists, Jonila Castro and Jhed Tamano, were reportedly abducted in Orion, Bataan. Members of the Church, human rights and advocacy groups have formed an independent fact-finding team as they claimed the police refused to add the case to the blotter.

Meanwhile, another killing appears to be connected to the murder of Jemboy Baltazar. His acquaintance, Daniel Soria, was fatally shot by an unidentified assailant in Malabon.

News accounts relied on the Soria’s partner, LA Moral, who revealed that her cousin, Reynaldo Bolivar, was the suspect that police were pursuing the day that they shot Jemboy in Navotas. Bolivar was with Soria when the latter was gunned down. The unfinished crime story should be pursued as it seems connected with police operations gone terribly wrong.