Gut issues plague gov’t: Rice problem topmost

Gut issues, topped by fast-rising inflation led by spikes in the price of rice and other foods, hit the people hard in September. Beleaguered, the Duterte regime cooked up the “Red October ouster plot” hoping to distract us, but it looks like the problem will persist (like a pesky esophagus?) for the rest of its mandated term.

The impact on the regime’s public satisfaction rating was telling. The Sept. 15-23 nationwide survey by the Social Weather Stations showed a 34 percentage-point plunge in the net satisfaction among the upper and middle classes (Class ABC) – from +91 to +47 – 6 points among the poor (Class D, from +56 to +50), and 13 points among the poorest (Class E, from +62 to+49).

The plunge was registered across all socio-economic classes and across all regions of the country. Notice, too, that everyone seems to have settled around the 50 percent point, from a short time ago when there were notable differences in attitude between classes and regions.

In that same Sept. 15-23 survey that dwelt on self-rated poverty, the SWS reported that more than half of 22.4 million Filipino families (per the 2015 Census on Population), 52 percent or 12.2 million families, averaging five members each, considered themselves poor.

That figure had risen from 42 percent in March to 48 percent in June 2018, further rising to 52 percent in September, which the SWS noted was the highest level of self-rated poverty registered in four years.

The SWS placed at P10,000 the median self-rated income threshold, or the monthly budget for home expenses that a family of five must spend so as not to consider itself poor. With adequate wage and salary increases not foreseeable, this threshold may remain a bane for quite some time more.

Coincidentally, the Philippine Statistics Authority (PSA) reported this week that 824,000 families (3.4 percent of the total number of families) experienced hunger in the past three months preceding its Annual Poverty Indicators Survey (APIS) for 2017. It didn’t specify the period of survey.

Of the total families who reported having experienced hunger, 486,000 families came from the bottom 30 percent of the population, while the other 338,000 families came from the top 70 percent of all Filipino families.

Per the AFIS findings, the combined income of those in the top 70 percent of the population is seven times more than the income of those in the bottom 30 percent. The peso income figures for 2017: the top 70 percent earned P2.95 trillion (87 percent of the P3.39-trillion total income of all families), whereas the bottom 30 percent earned only P437.98 billion. That’s a lot of catching up, in terms of income, for the bottom 30 percent to reach even one-third of what the top 70 percent get.

After the Bangko Sentral ng Pilipinas reported a sharp 6.7 percent increase in inflation in September, President Duterte came out blaming it on the continuing rise in prices of the oil products that we import. Yet he declared that he was assuming responsibility for the high price of food and other prime commodities.

But at the Cabinet meeting last Monday, Finance Secretary Carlos Dominguez presented PSA data which showed that the 10-fold rise in the price of rice contributed 1 percent to the September inflation rate, while the prices of other food items in the consumption basket – such as fish, meat, and vegetables – accounted for more than half of the inflation rate. The PSA reported that the food and non-alcoholic beverages price index had risen by 9.7 percent in September, the fastest increase since March 2009 (10.9 percent).

Also, the PSA reported that the rice inventory in September had dropped to its lowest level in almost 11 years (from the October 2007 inventory of 1.375 million metric tons). As of September 1, it said, the total inventory was 1.168 MMT, 18 percent lower than the 1.422 MMT level in 2017.

Concluding his presentation, Dominguez said that “rice tariffication and reforms in food policy are needed to address the repeated rice-supply problem.” Steps aimed at stemming inflation were subsequently taken in succession.

At that Cabinet meeting, President Duterte instructed the National Food Authority Council (NFAC) to remove restrictions on the volume of rice that could be imported. That instruction meant that any importer need not ask the NFA for accreditation to import rice at whatever volume; the president “wants to flood the markets with imported rice” at affordable price, explained then-presidential spokesperson Harry Roque. However, the Department of Trade and Industry (DTI) said that although rice importation would be “hassle free, ”NFA rules would remain in place.

The Kilusang Magbubukid ng Pilipinas (KMP) and the Makabayan bloc of progressive partylist members of the House of Representatives have opposed the unbridled rice importation order as inimical to the interest and welfare of poor farming families.

On Wednesday, Duterte certified as urgent for legislative action a bill that would convert the current quantitative restrictions on rice importations into 35 percent tariff. It was a delayed action, since the House of Representatives had already passed on final reading in August its version of the tariffication law. However, the certified bill would remove the NFA licensing requirement (which the House version retains). It conforms with the Senate version currently under plenary deliberations.

Earlier (on September 21), Duterte issued Administrative Order No. 13, which aimed to streamline procedures in importing agricultural products, including rice. AO No. 13 removes non-tariff barriers to such importations. He also issued three Memorandum Orders: One of these, MO 26, directs the Department of Agriculture and the DTI to implement measures to reduce the gap between the farm gate and retail prices of agricultural products.

Of late, Agriculture Secretary Manny Piñol reported that rice retail prices in Iloilo had dropped to as low as P43 per kilogram, from P60/kg. The drop, he explained, reflected the decline in the farm gate price of palay caused by the impending arrival of one million metric tons of imported rice before yearend. The buying price of palay in the current harvest season, he added, has already dipped from over P20/kg to P16/kg. He assured the worried farmers that the NFA (which has been returned to DA supervision) would buy “clean and dry palay at P17/kg plus an incentive of P3.70/kg.” (Is this the DA-DTI gapreducing measure under MO 26?)

The question, however, is how much of the farmers’palay harvest can the NFA buy at that price? Its past record in this regard has been dismal. Email: satur.ocampo@gmail.com