PITC to import rice, lower prices to P27-P32 per kilo

PITC to import rice, lower prices to P27-P32 per kilo

- in Consumer, Economy, Philippines
PITC President Dave Almarinez posing with seized illegally smuggled white rice. The PITC and DTI are now seeking lowered tariffs on imported rice to ease entry into the market of new rice for consumers.Photo via PITC.

To augment the current supply of rice provided by the National Food Authority (NFA), an attached agency of the Department of Trade and Industry (DTI) wants to tap the bulk procurement expertise of the Philippine International Trading Corporation (PITC) to import up to  150,000 metric tons (MT), or the equivalent of three million bags of rice, through government-to-government procurement. The PITC’s international trading experience should bring about quick supplies which are expected to be sold to consumers at a subsidized price of P27 to P32 per kilo.

According to Trade Undersecretary Ruth Castelo, the agency is only awaiting the approval of the NFA to clear the proposal. Pending this, the expected arrival of the additional supplies is December.

“DTI’s effort is part of the government’s all-out efforts to find concrete solution by tapping various agencies to extend assistance in bringing down prices of rice,” she said.

PITC President and CEO Dave M. Almarinez said that the P27-P32 per kilo price point would allow the government to discourage hoarders and provide Filipino consumers access to affordable commercial rice. The average price of rice is currently at an all-time high of P43 per kilo.

Flooding the market with imported rice would leave hoarders no option but to release their supply into the market, which would eventually lead to market stabilization as supply grows.

“Smuggling, hoarding and ‘man-made’ price manipulation in the rice industry are the main reasons why low-income families are now facing difficulties in buying affordable rice within their means. They had to endure long lines just to buy evenly-priced rice rationed and supplied by the NFA in designated areas,” said Almarinez. The PITC’s involvement is a show of support for the efforts of the DTI and NFA to control the prices of commercially available rice.

“PITC is throwing its full support behind the government’s effort, through DTI, to address the current artificial rice shortage,” he added.

The PITC will purchase the additional rice from Thailand and Vietnam. The current 35 percent tariff on imported rice is a factor to the market’s high prices. Through government-to-government procurement, the administrative and non-tariff barriers involved in rice procurement will be diminished, leading to a reduced cost of imported rice, according to Almarinez.

The PITC is also looking into collaborating with other government agencies to provide logistics support and warehouse facilities as a form of government subsidy to allow for maximum price reduction for consumers.

The Economic Cabinet Cluster has previously submitted a draft executive order to President Rodrigo Duterte that aims to remove administrative and non-tariff barriers on the importation of food items. The measure is aimed at tempering the rise of inflation rates.

The PITC’s importation strategy employs forward selling, wherein they select direct distributors and retailers who would act as importers who can supply directly to consumers. The PITC would facilitate the importation.

Almarinez said that areas experiencing low supply and high inflation will be prioritized.

Previously, the PITC has helped to bring down the cost of medicines in 1900s and the 2000s. The agency has aided the DTI in several critical economic programs since its inception.

Food and infrastructure conglomerate San Miguel Corp. has expressed interest in rice importation. Ramon Ang, the company’s president and COO told reporters that San Miguel is exploring the idea of taking a role in augmenting the supply of the country’s staple grain.

“We will help by importing. We have grain terminals where we can build extra silos…We will be able to help in the food security,” Ang told reporters. The silos Ang referred to would aid in the product’s storage, meaning also that San Miguel would not be limited to transactions by the sack and would be able to purchase the crop in bulk. Storage in silos can preserve rice for as long as two years.

Last week, the NFA approved for the additional importation of rice. The measure will see the purchase of 250,000 MT of rice this year, following an open tender scheme. With this, the agency’s total rice imports for the year thus far is 750,000 MT. The figure includes the half million tons of imports approved earlier this year.

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