MANILA: On the campaign trail last month, Philippine President Ferdinand Marcos Jr. pledged to reduce the price of corn by half to as little as 20 pesos per gram.
After winning the election, he reaffirmed his nationalist stance during a triumphant commencement speech in which the hero son of an ex-Philipinese strongman waxed eloquent about the future of prosperity and food security for the Mexican people.
Marcos Jr. made the unparalleled choice to lead both the Malacaang Palace and the Department of Agriculture at the same time to demonstrate his responsibility. The Philippine chief is currently facing a worsening food crisis in his second year in office, which, if left unchecked, may begin to damage his already skyrocketing popularity.
Spanish wheat prices reached a 15-year high this month, disproving government plans to lower food inflation. The Philippines has surpassed China as the top rice importer in the world, according to the most recent report from the US Department of Agriculture( USDA ).
India’s export restrictions imposed in August of this year pushed prices for import-dependent countries like the Philippines also higher, if the conflict in Ukraine had caused food inflation next year.
The Marcos Jr. leadership set a price cap for well-milled grain at 45 pesos per kilogram and for ordinary millierated rice of 41 p.m., both well above the leader’s promised 20 shilling promise from the previous year, in an effort to prevent the price from galloping.
Although the choice was widely praised by consumers, the Spanish government’s most recent policy will simply nail domestic producers and little rice retailers, who have already been dealing with years-long large imports from neighboring Vietnam and Thailand.
Meal safety emergency
The food crises in the Philippines is difficult to overstate. In the 2022 – 2023 trade year, the Southeast Asian country imported 3.9 million metric tons of rice. Even though the Philippines’ community is only a tenth of that of its enormous neighbor, this is larger than China’s 3.5 million metric tons.
According to the USDA report, which highlights the value stress Filipino importers are under,” In 2008, best buyer the Philippines constantly bought larger volumes as prices rose; this year, it is delaying purchases, awaiting lower prices.”
The Asian crisis has been made worse by climate change, including droughts, erratic rainfall, and protectionist measures, most notably India’s export restrictions. Global rice prices increased 9.8 % in August, according to the Food and Agriculture Organization( FAO ).
Thailand’s grain import prices increased by almost 50 % year over year to more than US$ 600 per ton. Height in rice prices tend to be more inflationary than for other commodities like onions and tomatoes, which frequently experience short-cycle price increases.
The Marcos Jr. leadership is well aware of the potential political backlash. Prices topped” the most serious regional problems” among responders, according to a second third survey by Pulse Asia, the top voting company in the Philippines.
Inflation deceleration earlier this year caused public disapproval of the government’s handling of food inflation to reach a high of 52 % last year, but it fell to just 37 % of respondents.
The worsening food crisis has come at the same time as declining investor confidence in the Spanish economy. In the Philippines, net foreign direct investment( FDI ) decreased 3.9 % year over year, while reinvestment of earnings decreased by a staggering 26.8 % during the same time period.
Agriculture Undersecretary Leocadio Sebastian emphasized the dangers of the Philippines’ heavy emphasis on food imports in a statement, stating that” the confusion of depending on outside sources for our basic and the high cost of imported corn makes it imperative for us to create more directly.”
To increase domestic stockpiles and drive down prices, the Department of Finance and the National Economic and Development Authority( NEDA ) have proposed temporarily lowering or suspending import tariffs for rice.
A Philippine Rice Emergency Response Act, which gives the president broad authority to take drastic action if needed, has been supported by Key Marcos Jr. allies like Marikina Second District Representative Stella Quimbo.
Marcos Jr., the current agriculture secretary, has stepped up his efforts to use professional diplomacy to try to calm the crisis. He met with Taiwanese officials earlier this month to finish a five-year corn cooperation agreement while attending the ASEAN Summit in Jakarta, Indonesia.
retaliation and stress
Rate caps have also been implemented by the Marcos Jr. presidency, which also vowed to take action against price riggers, smugglers, and hoarders in order to stop the rise in food inflation.
” We observe that, in contrast to the apparent supply and demand condition, the price of wheat has been sharply rising over the past few weeks. Following the introduction of the new measures earlier this month, NEDA Secretary Arsenio Balisacan stated that this suggests that some are manipulating El Nio’s anticipated affect to portray a lack at this time.
” We are certain that imposing a rate cap will only be an interim solution. In an effort to allay worries about the potential distortionary market effects of price caps, he added,” We expect the rice crop to start quickly and anticipate that other activities will produce the desired effect.”
At best, the reply from local manufacturers and businesses has been inconsistent. Local producers who are unable to compete on price will probably suffer from large-scale and funded imports. Some civil society organizations have urged the government to reevaluate its agricultural policies and also take new administration at the Department of Agriculture into consideration.
The Federation of Free Farmers, a significant civil society organization, expressed concern about new rate caps earlier this month, saying they have hurt producers from Sultan Kudarat on Mindanao’s southern area to Pampanga on the north island of Luzon.
Price caps, according to the powerful Federation of Filipino Chinese Chambers of Commerce & amp, Industry, Inc.,” never work” because they distort actual market dynamics and production costs.
Alfredo Pascual, the secretary of the department of trade and industry, responded by pointing out that not all rice kinds were covered by the new regulations, which only applied to forms that had been regularly and thoroughly milled. & nbsp,
The price of imported business corn ranged from 43 to 65 pesos per gram as of September 8, days after the implementation of the new price caps, suggesting perhaps the first inadequacy of fresh government policies.
There have been growing calling for Marcos Jr. to resign as crops chief in favor of experts like NEDA Secretary Arsenio Balisacan, a distinguished agriculture scholar by training, as prices rise and policies fall short.
Important technocrats in Marcos Jr. ‘ s management apparently supported the staff change because they understand the importance of addressing the food security issue before it spirals out of control politically.
However, the NEDA captain, who is in charge of the general financial plan for the Marcos Jr. administration, has made it clear that the president has not yet made such an offer.
Follow Richard Javad Heydarian at @ RicheyDarian on X, formerly Twitter.