Philippine Agriculture Department Slashes Rice Price Cap to Ease Market Costs

In a move to curb rising retail prices, the Philippine Department of Agriculture (DA) has announced a reduction in the maximum suggested retail price (MSRP) for 5 percent broken rice in Metro Manila, dropping it to PHP52 per kilogram from PHP55. This adjustment, effective from February 15 as per Administrative Circular No. 3, reflects a response to falling global rice prices, notably in major rice-exporting countries like India, Thailand, and Vietnam. As of January, the price for 5 percent broken rice from India stood at USD425.4 per metric ton, Vietnam at USD416 per metric ton, and Thailand’s 25 percent broken rice at USD458.7 per metric ton, according to the Food and Agriculture Organization of the United Nations. DA spokesperson Assistant Secretary Arnel de Mesa explained that this gradual price adjustment allows retailers to manage their existing stock purchased at higher rates and renegotiate terms with traders and importers. De Mesa emphasized that the strategy was not abrupt, aiming to facilitate a smoother transition for market players. The DA expects full compliance with the new PHP52/kg MSRP within two weeks. Previously, the MSRP for 5 percent broken rice was set at PHP58 on January 20 and reduced to PHP55/kg on February 5, which was well-received by local markets. The DA’s goal is to further decrease the MSRP to PHP49/kg by March. As of February 15, imported premium rice prices in Metro Manila ranged from PHP48/kg to PHP58/kg, and local premium rice from PHP46/kg to PHP61/kg, according to the DA’s price watch. Regular-milled to well-milled imported rice prices ranged from PHP38/kg to PHP46/kg, while local varieties were priced between PHP35/kg to PHP54/kg. The MSRP was initially introduced to counteract high retail rice prices despite reduced tariffs on imported rice from 35 percent to 15 percent, declining global prices, and stable domestic rice stock. Despite these measures, rice inflation in the Philippines has remained above the government’s 4 percent target, peaking at over 20 percent in several months of 2024. In addition to adjusting the MSRP, the DA has declared a food security emergency for rice and is promoting Rice-for-All options at Kadiwa ng Pangulo centers and kiosks in select public markets and railway stations in Metro Manila.