This is a rookie mistake, one you wouldn’t expect from a government that has PhD economists among its top advisers.executive orderSo starting today, September 5, retailers must sell regular-milled rice at no more than P41 per kilo and well-milled rice at no more than P45 per kilo.: they can be imprisoned for “less than a year” and be fined anywhere from P5,000 to P1 million.
Marcos added, “It is crucial and urgent for the State to guarantee that basic necessities are not only sufficient but also reasonably priced and conveniently accessible to every Filipino.” With large demand but not enough sellers of rice, his price ceilings will almost certainly cause shortages. Expect queues at the select outlets that choose to stay in the market and sell cheap but bad-quality rice.
In the more distant past, the late dictator Ferdinand E. Marcos also relied a lot on price ceilings on rice, corn, sugar, and coconut oil. But this also predictably led to shortages.reported The Philippine Constabulary “sent inspectors to warehouses and stores around the country to seize hoarded stocks.” Marcos Sr. then instructed the police to “show no mercy to profiteers and hoarders.”Just like his father before him, Marcos Jr. is justifying his rice price ceiling due to rice hoarders and profiteers.
As for smuggling, it may occur between provinces of the Philippines if the rice price ceilings are implemented better than in others. Sellers may also want to smuggle cheaper rice from abroad, and they can sell that in regulated markets where the price ceilings are strictly enforced. Third, government can give targeted and time-bound subsidies for farmers to help them shoulder the rising costs of inputs. However, this might be difficult given tight fiscal constraints. Last year alone, the government’s revenue shortfall was P1.6 trillion.
Source: Financial Digest (financialdigest.net)
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