Soar­ing rice prices dulling Duterte’s lus­tre in Philip­pines

Bangkok Post - - NEWS MAKER - AURORA ALMENDRAL

>> Through con­tro­versy af­ter con­tro­versy, Pres­i­dent Ro­drigo Duterte of the Philip­pines has al­ways been able to count on his ap­peal among the na­tion’s poor. But soar­ing prices for sta­ples like rice are start­ing to alien­ate that vi­tal base of sup­port.

Dur­ing his pres­i­dency, Mr Duterte has of­ten clashed with cher­ished in­sti­tu­tions like the Ro­man Catholic Church, made jokes about rape and led a bru­tal war on drugs that has left thou­sands dead. But he now faces deep­en­ing dis­con­tent in an area that par­tic­u­larly af­fects the ur­ban poor: the price of food.

The coun­try’s in­fla­tion rate has hit a nine-year record — 6.7% — af­ter climb­ing for nine con­sec­u­tive months, the Philip­pine Statis­tics Author­ity said last week. That sit­u­a­tion is bad enough that on Tues­day, Mr Duterte or­dered re­stric­tions dropped on the im­por­ta­tion of rice, end­ing a decades-old pro­tec­tion­ist pol­icy ad­min­is­tered by the coun­try’s Na­tional Food Author­ity.

Over the past year, veg­etable prices have gone up nearly 20%, fish prices 12 per­cent and meat prices 7 per­cent. And while global rice prices have been sta­ble, prices in the Philip­pines have been as high as dou­ble the im­port price.

“Five hun­dred pe­sos feels like one peso now,” said Lil­ian Gomez, 52, for whom it doesn’t take long th­ese days to hit her bud­get limit at the Agora mar­ket in Manila. “All the prices have gone up since Duterte be­came pres­i­dent.”

She said she had not bought fresh meat or fish in two months, and she rem­i­nisced about cook­ing dishes whose in­gre­di­ents she could no longer af­ford: ba­nana blos­soms stewed in co­conut milk, eg­g­plant with shrimp paste, spicy taro leaves. To stretch the rice she buys for her fam­ily of three, she plumps it into por­ridge.

Char­ac­ter­is­ti­cally, Mr Duterte re­sponded to the higher prices first with threats. Pub­licly, he be­gan sug­gest­ing that there was a con­spir­acy among rice deal­ers. He la­belled them as car­tels, hoard­ers and smug­glers, telling them to “stop mess­ing with the peo­ple.”

“Con­sider your­selves warned,” he said, “or the full power of the state will be upon you.”

Em­manuel Pi­nol, the agri­cul­ture sec­re­tary, backed up Mr Duterte’s threats with high-pro­file raids of rice ware­houses, and an­nounced a bounty of 250,000 pe­sos, or about $4,600, or 150,700 baht, for in­for­ma­tion lead­ing to the ar­rest of rice hoard­ers.

The blame be­gan widen­ing, with Mr Duterte sug­gest­ing that Pres­i­dent Don­ald Trump’s trade war with China was part of the prob­lem — as were drug ad­dicts, who he joked had re­placed their meth habits by eat­ing huge quan­ti­ties of rice, driv­ing up prices.

The ar­rival last month of Ty­phoon Mangkhut de­stroyed about 250,000 tonnes of rice, ac­cord­ing to the agri­cul­ture depart­ment, which did not help.

The Na­tional Food Author­ity ini­ti­ated sev­eral emer­gency im­ports of rice, each time as­sur­ing the pub­lic that the in­ter­ven­tion would drop prices, but it proved too small and too late. Ex­perts say the coun­try’s food agency has be­come paral­ysed by in­fight­ing among Duterte ap­pointees. And his ad­min­is­tra­tion is be­ing widely ac­cused of mis­man­age­ment that has steadily wors­ened in­fla­tion and threat­ened to slow the eco­nomic growth that Mr Duterte has pri­ori­tised.

Ra­mon Clarete, a pro­fes­sor of eco­nom­ics at the Univer­sity of the Philip­pines Dil­i­man in Que­zon City, said the prob­lem with rice, in par­tic­u­lar, was a cri­sis of the gov­ern­ment’s own cre­ation.

“It was the in­com­pe­tent mis­take of the NFA not stock­ing it­self ad­e­quately that gave fuel to in­fla­tion,” Mr Clarete said of the Na­tional Food Author­ity, which is re­spon­si­ble for main­tain­ing rice stocks and in­flu­enc­ing prices within the Philip­pines’ pro­tec­tion­ist im­port regime. “It could be they are not ap­pre­cia­tive enough of how the mar­ket works. Or cruel.”

Other fac­tors are adding to Mr Duterte’s prob­lems. Global oil prices are ris­ing, mak­ing fuel more ex­pen­sive. The value of the coun­try’s cur­rency, the peso, has weak­ened be­cause of broader in­vestor con­cerns about global growth, driv­ing up the price of im­ports.

But driven to keep the coun­try’s growth revved up for years, lead­ers in the Philip­pines have con­trib­uted as well. In ad­di­tion to tightly con­trol­ling rice sup­plies, the coun­try has long kept in­ter­est rates low. Mr Duterte has slashed taxes and in­creased in­fra­struc­ture spend­ing. All that adds to eco­nomic growth but tends to drive prices up, too.

This has cre­ated im­me­di­ate frus­tra­tions among the poor and the mid­dle-class Filipinos whom Mr Duterte has heav­ily courted dur­ing his time in of­fice. The ad­min­is­tra­tion has low­ered im­port taxes, and pledged to in­crease sup­plies of af­ford­able fish and fuel — moves that the po­lit­i­cal an­a­lyst Richard Hey­dar­ian de­scribed “as a re­flec­tion of a sense of des­per­a­tion on the part of the gov­ern­ment.”

With Tues­day’s move to drop re­stric­tions on for­eign rice im­ports, Mr Duterte has taken the big­gest step yet, most likely in recog­ni­tion that his po­lit­i­cal base is waver­ing. The ur­ban poor are the largest vot­ing bloc in the Philip­pines, and Mr Duterte courted their votes with prom­ises to trans­form their lives and bring in a wave of in­fra­struc­ture im­prove­ments that would mod­ernise the coun­try. A new tax law that was passed to help pay for Mr Duterte’s in­fra­struc­ture plan low­ered in­come taxes for the mid­dle and up­per classes. But it in­creased ex­cise and value-added taxes, push­ing prices up across the board.

While Mr Duterte’s pop­u­lar­ity has be­gun to drop among the poor and the mid­dle class, ac­cord­ing to re­cent polls, it has cer­tainly not dis­ap­peared al­to­gether, with sat­is­fac­tion rat­ings still top­ping 60% for his ad­min­is­tra­tion. But poll­sters say eco­nomic wor­ries now dom­i­nate lists of na­tional con­cerns.

An­gelito Batac, a 53-year-old car­pen­ter in Navotas, in north­ern Manila, said: “This started when Mr Duterte be­came pres­i­dent. We can’t breathe. He’s not do­ing any­thing but curse”.

LEARN­ING TO MAN­AGE WITH LESS: Fer­nando Gon­za­les checks his fam­ily’s ra­tion of state­sub­sidised rice in Manila where soar­ing food prices are a source of wide­spread dis­con­tent.

VALU­ABLE STOCK: A Na­tional Food Author­ity rice ware­house in Que­zon City, Philip­pines. Soar­ing prices for rice is putting the squeeze on Ro­drigo Duterte’s gov­ern­ment.

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